Trade: Tax Subsidies

Lord Dykes: asked Her Majesty's Government:
	Whether they will support the European Union Commission and Council of Ministers' efforts to persuade the United States Congress to accept the World Trade Organisation's ruling to dismantle tax subsidies for exporters under the foreign sales corporation schemes.

Lord Sainsbury of Turville: My Lords, Her Majesty's Government hope that the United States will consider carefully and take the necessary action to comply with the latest legally binding ruling from the World Trade Organisation on foreign sales corporations. The Government also welcome Commissioner Mandelson's statement that he is,
	"ready to work closely with the US towards finding a solution to this dispute".

Lord Dykes: My Lords, I thank the Minister for that Answer. Is not the dispute dragging on far too long without a proper American response? It started back in 1997. Congress pretended to repeal the necessary provisions allowing for the tax breaks, but since then many US corporations, including Boeing, have apparently benefited from them. Will the Minister, the Government and the EU make representations to the WTO, following the appeal result, which was conciliatory but demanded action by the Americans, to make sure that they now follow international law, as, indeed, they should do in other fields?

Lord Sainsbury of Turville: My Lords, I hoped that I had made it clear that we fully supported the EU in the matter. However, we always suggest that people should try to resolve the issues by discussion rather than by retaliatory action because, of course, always in such retaliation, people get hurt, particularly small businesses which are dependent on trade with the US. Therefore, if the issues can be resolved by discussion rather than by retaliation, we would always counsel that as the first way forward.

Democratic Republic of Congo

Lord Avebury: asked Her Majesty's Government:
	What plans they have to deploy European Union troops to the Democratic Republic of Congo as requested by the United Nations, ahead of the elections there on 29 April.

Lord Triesman: My Lords, the EU is considering a UN request for support to the UN force in DRC—MONUC—during the election period. No decision has been taken yet. The United Kingdom believes that the EU should consider the request favourably. Given our heavy operational commitments elsewhere, the United Kingdom will be unable to make a contribution to any deployment, but we are playing a leading role in efforts to take forward the overall DRC peace process, and we will continue to do so.

Lord Avebury: My Lords, presumably it would be the French and Germans who would supply the troops if the request was accepted. Does the noble Lord really think that 1,000 additional troops would be capable of providing security in a region that is as large as western Europe, as has been suggested? What other aspects of the mission are we still discussing with the head of UN peacekeeping operations there?

Lord Triesman: My Lords, the noble Lord asks exactly the right question. The contribution of any further forces should be only for purposes that add value to the existing MONUC force on the ground. There is discussion about whether the additional forces on standby might very well assist in guarding the airport and rescue missions, dealing with disturbances in Kinshasa and making sure that they are available for the things that the MONUC forces cannot do on a rapid basis. We believe that there are significant operations of that kind that are worth considering.

Lord Howell of Guildford: My Lords, does the Minister agree that there still seems to be a lot of vagueness about what the EU contribution would be? One suggestion is that it should be a rapid reaction force that sits outside Congo territory and is called in for specific reasons. Can he tell us what the thinking is? Is the new force to replace some of the 16,000 UN troops or to reinforce them? What is the British logistical contribution, even if we do not have the troops to do it? Is it affected by the decision of the Ugandan leader, Mr Museveni, who now says that he will withdraw his Ugandan forces, which seem to be helping the rebels, and that the Lusaka peace accord should be invalidated? That seems to change this dangerously vague situation yet again.

Lord Triesman: My Lords, as I understand it, the UN request was made between Christmas and the New Year. It obviously took a little while for people to become fully and thoroughly engaged. There is a sense that the most useful thing to do at the moment would be to send a pre-deployment group to facilitate whatever else might then follow when the council has taken a decision in the EU about the most useful alternative. That discussion is still going on. It is not vague; it is a serious discussion. The UK has six staff officers with MONUC, who are involved in detailed planning. There may be more that we can do in that area. We are making a £40 million contribution to the MONUC force. We are also in detailed discussions—I took part in them through last weekend—with Vice-President Ruberwa. I am attempting to talk to President Kabila about making sure that as much disengagement as we can achieve takes place in eastern DRC.

Lord Anderson of Swansea: My Lords, given the demand elsewhere, is the Minister confident that sufficient transport aircraft are available to take the troops there in the time available? Which countries in the EU does he believe are likely to provide troops, given that some, such as Spain, have withdrawn troops from Iraq? Is there not now a case for asking those who have failed to contribute elsewhere or do not now contribute elsewhere to make a serious contribution?

Lord Triesman: My Lords, it is possible in these unusual circumstances of a UN additional request that forces could come from outside the normal rota. However, at the moment, as the noble Lord, Lord Avebury, said, a good deal of the discussion is about the troops who are currently in the rotation; that is, German troops and French detachments. Our expectation is that troops will by and large be airlifted alongside those forces because the contributing countries are capable of doing that. Obviously, if there were any shortfall, we would all have to look at that again.

Lord Hylton: My Lords, bearing in mind the short debate last night, to which the Minister replied, will he assure the House that every possible effort will be made to have Mr Kony and the other leaders of the LRA thought to be hiding in the Congo arrested, whether by the UN troops or by the Congolese forces?

Lord Triesman: My Lords, I give that assurance. It is Otti's group of the LRA, in particular, that is active in the eastern DRC. The MONUC troops have engaged with the group vigorously. In some cases, they have heroically lost their lives in that engagement. However, I think that everybody would say that the MONUC troops have shown no lack of intent in pursuing those LRA bandits and bringing them to justice.

Lord Avebury: My Lords, will the Minister join me in congratulating the MONUC troops on their recent military successes in south Kivu and in the neighbourhood of Bunya? Does he really think that the conditions will be such as to guarantee the freedom of the people to get to the polls and cast their vote on 18 June, or is a further increase in military forces in the territory needed for that purpose?

Lord Triesman: My Lords, the noble Lord rightly made the point in an earlier question that we were talking about a country that was the size of western Europe and had no roads. During the well regulated referendum on changing the constitution to hold the elections, 25 million to 28 million people had the opportunity to vote. We believe that that can be repeated. However, for the reasons given, we are alert to the dangers. That is one of the reasons why the United Nations has made this request to the EU. I should like to believe that between MONUC and ourselves in the EU we shall be able to ensure the same success in the election as was achieved in the referendum. The referendum should give us some hope that we can do that.

Lord Howell of Guildford: My Lord, will the Minister comment on my query about the Lusaka peace accord? Is it still in place? Is there a peace in existence for that accord to underwrite?

Lord Triesman: My Lords, I am sorry I did not address that issue. The accord is in place. Some of the disagreements that have occurred about electoral districts and who may or may not run in them has put it under some strain in the past couple of weeks. That is one of the reasons why I have been in discussion with the principal players in the area to ensure that they carry on in peaceful discussion rather than re-engage in military action while the issues are worked out. I asked them in particular to desist from any return to violence while President Mbeki visits the leaders in order to mediate between them. I believe that that mediation is going on as we meet.

Political Parties: State Funding

Lord McNally: asked Her Majesty's Government:
	What plans they have to introduce state funding for political parties.

Baroness Ashton of Upholland: My Lords, political parties in the UK already receive varying degrees of state support for their activities that, according to a recent House of Commons research paper and figures from the Electoral Commission, in the financial year 2004–05 amounted to £6.8 million. There is an ongoing debate on party funding, but as yet there is no consensus on the way forward.

Lord McNally: My Lords, I thank the Minister for that reply. Does she recall the title of the Labour Party 1997 manifesto, New Labour because Britain deserves better? Does she also recall a commitment in that manifesto? It states that,
	"The Conservatives are afflicted by sleaze and prosper from secret funds",
	and says that reform of party funding will be a priority to end sleaze. Is she aware that a recent opinion poll showed that 82 per cent of people considered this Government to be as sleazy or sleazier than their predecessor? In those circumstances, how long shall we go round this merry-go-round of crisis and revelations until we realise that funding from millionaires is corrupting of individuals and institutions? We must have a system of state funding—

Lord Hughes of Woodside: Speech.

Lord McNally: I know you are embarrassed, Bob. I would be if I were you. Unless we have a system of state funding that caps individual donations and rewards both party membership and votes won, we shall visit the issue again and again to the damage of our democracy.

Baroness Ashton of Upholland: My Lords, I have the greatest respect for the noble Lord, as he knows. In a sense, he is making an important point of principle about which the Liberal Democrats feel passionately and strongly. They have argued very well that state funding should be considered. There is no question in my mind that recent press reports will lead us to have that debate, certainly in your Lordships' House, and I look forward to participating in it. However, he loses a little of the strength of his argument in the way in which he describes it. I well remember the 1997 manifesto. I believed then that Britain deserved better; I think that Britain got better. In education, health and all the policies for which we have been responsible, we can point to dramatic improvements and changes that are an inspiration to people.
	As the noble Lord will know, there is no doubt that opinion polls will tell us many things. I declare my interest: I live with a pollster. Opinion polls pass through my household every day. Therefore, I understand that issue.

Lord Hughes of Woodside: My Lords, I am not in the least embarrassed by the noble Lord, Lord McNally. Will the Minister take into account the immense strides that have been made on transparency of political funding in the past years? Nevertheless, does she agree that there must be absolute transparency? No one disagrees with that. May I ask the noble Lord, Lord McNally—

Noble Lords: Oh!

Lord Hughes of Woodside: My Lords, I mean the Minister. Does she feel that the noble Lord, Lord McNally, perhaps protests too much?

Baroness Ashton of Upholland: My Lords, as I have already indicated, the noble Lord, Lord McNally has consistently taken that view on state funding. Perhaps I am disagreeing with the method of his protestation rather than his absolute right to protest in your Lordships' House. I agree with my noble friend that transparency is vital.

Lord Peyton of Yeovil: My Lords, is the Minister aware that those in this House and another place who deeply fear the degree of ascendancy that the present Administration have established over Parliament are anxious that we must be very careful how we travel down the road of extending government patronage?

Baroness Ashton of Upholland: My Lords, I think that I understand the noble Lord's point. In the light of recent debates in your Lordships' House and another place, I am not sure that ascendancy over Parliament is something that the Government have successfully achieved in all circumstances. Parliament plays a full role in the life of our democracy and in ensuring that government policies are scrutinised appropriately, and nowhere better than in your Lordships' House. I would have thought that he would agree; I see he does not.

Lord Soley: My Lords, does my noble friend agree that all three political parties have taken money from millionaires—loans and handouts—including the Liberal Party, which took £2.5 million not long ago? They have all done it, and we will all have to go on doing so as long as we want to run a modern democracy unless we go down the road of state funding, which I have considerable sympathy for. The people of this country need to understand that we fund parties either in the way that we do now or by some sort of state aid, but it is important that we open up the system, which is what we did. I would like the Minister to confirm that, if all three parties got together, we could solve this in the greater interest of democracy and of the political parties themselves.

Baroness Ashton of Upholland: My Lords, I agree with my noble friend that this is something that all political parties need to consider and probably need to think about together. I also agree that there is an issue of debate, a debate that we have had in your Lordships' House and outside in the wider community, about the relationship between public money being used to support political parties—democracy, one might say—and the ability of individuals who feel passionately committed to their political party to be able to contribute. That is where the debate has to settle.

Lord Goodhart: My Lords—

Lord Henley: My Lords, in the light of the request—

Lord Goodhart: My Lords, it is our turn.

Lord Davies of Oldham: My Lords, it is actually the turn of the Liberal Party, but we have plenty of time.

Lord Goodhart: My Lords, in view of recent disclosures, does the Minister agree that it is now time that all loans to political parties, at whatever rate of interest, should be treated as donations and disclosed accordingly? Does she believe that people ever lend money to political parties because they think it a good commercial investment?

Baroness Ashton of Upholland: My Lords, I do not know the basis on which people determine where to loan money in any circumstances. I hesitate to say that we should take what is still being looked at and largely speculated on and determine what ought to be the future policy. It is clear, though, that we need to look at the issue.

Lord Henley: My Lords, I congratulate the noble Lord, Lord McNally, on the timing of this Question. In the light of the request for greater transparency from the noble Lord, Lord Hughes, which was endorsed by the Minister, will she comment on the remarks made by the treasurer of the Labour Party yesterday about a lack of transparency and the fact that he was never told of various loans made to the party before the last election?

Baroness Ashton of Upholland: My Lords, I too congratulate the noble Lord, Lord McNally, on the timing of his Question, because it enables us to have an important discussion. I am not going to comment on the remarks made by Mr Dromey, the treasurer of the Labour Party. He made his position perfectly clear; he has indicated what he knew and did not know. We now have to wait and see what further action is taken.

Lord Laming: My Lords, I do not want to enter into party-political knockabout, but does the Minister agree that there is an important issue here about the public's confidence in the political system, irrespective of party? We are facing a situation in this country where the majority of people do not vote, which is a terrible thing to happen when you think of the struggle that there was to get the franchise. Would the Minister accept that this issue, apart from separate party politics, must be taken seriously?

Baroness Ashton of Upholland: My Lords, I could not agree more with the noble Lord, Lord Laming, about the critical importance of confidence, which we must inspire. Noble Lords who have participated in the Electoral Administration Bill, which we will consider again this afternoon, will know that I tried to establish the theme at the beginning that together we were seeking to ensure that we had a thriving, healthy democracy in which people can and do participate.

Lord Greaves: My Lords, an important report published this week by the Rowntree charitable trust about local governance in Burnley and Harrogate reveals that, in Burnley, all the political parties together have no more than 100 local active workers, which suggests that local democracy and politics is somewhat moribund. If we get state funding for political parties' campaigning work, is it not important that steps are taken to make sure that a substantial proportion of that funding is directed to a local level to help to invigorate democracy where it really matters?

Baroness Ashton of Upholland: My Lords, I am sure that debates on state funding need to take into account exactly the points that the noble Lord, Lord Greaves, has raised.

Lord Hurd of Westwell: My Lords, does the Minister really think that the people of Burnley or anywhere else will recover their enthusiasm for democracy by being told that they, as taxpayers, have to begin to contribute to political parties, over and above what they do already?

Baroness Ashton of Upholland: My Lords, in a sense, the noble Lord, Lord Hurd, puts the other side of the argument. Debate in the House and elsewhere is focused on whether it is right that taxpayers' money should be used for that purpose. There is an argument that says yes, because it is about democracy and making sure that political parties operate effectively and well. On the other hand, there is an argument that, if we use the money for that purpose, we are not using it for education, health and so on. That is the pivotal point, but the debate is important.

Lord McNally: My Lords, I am grateful for the tribute about my luck—I am going to Cheltenham tomorrow, so I hope that my luck holds. May I say to the noble Lords, Lord Hughes and Lord Soley—

Noble Lords: No.

Lord McNally: In that case, may I ask the Minister to be aware that anyone speaking from the Benches once occupied by Lloyd George does so on these issues with a certain humility? I ask her to take forward what I thought was the spirit of all her answers. The warning of the noble Lord, Lord Laming, that the issue is undermining our democracy is quite right. There is a case for all-party talks to be initiated to address the issue. I know that my party would willingly participate in such talks.

Baroness Ashton of Upholland: My Lords, I hope that the noble Lord will not mind if I say, tongue in cheek, that I wish that he had gone to Cheltenham today. I accept the comment about humility. He will know that, on all issues to do with electoral concerns, I believe that it is important to have a debate between the parties, as we have sought to do on the Electoral Administration Bill. There is much that unites us, some that divides us, but we are all concerned to make sure that our democracy thrives in the best possible way.

Israel: Boundaries

Lord Campbell-Savours: asked Her Majesty's Government:
	Whether they will meet representatives of the Government of Israel to discuss recent developments concerning Israel's boundaries.

Lord Triesman: My Lords, final status issues can be resolved only through negotiations and agreement between the parties. Under phase three of the road map, both parties will determine their permanent borders through mutual agreement. Settlement building and routing the barrier on occupied land is illegal under international law. It threatens the territorial contiguity of any future Palestinian state and is an obstacle to peace. The barrier's route should be on or behind the green line. On 2 March, we raised the issue of settlements and the barrier and discussed Israeli acting Prime Minister Olmert's plans for the West Bank with the Israeli Prime Minister's special adviser.

Lord Campbell-Savours: My Lords, is not the recent statement of acting Prime Minister Olmert threatening to steal more Palestinian land and incorporate it within the Israeli state an open invitation to Hamas to hit back with violence? Are the actions of the Israeli Government not only provoking a lot of anger among Islamic populations throughout the world, but inevitably leading us into a world conflict and, some people believe, a world war?

Lord Triesman: My Lords, we are studying the speech that the acting Prime Minister has made. We are not yet in a position to know exactly where the lines will be drawn on the map, but early indications suggest that the matter is a threat to the contiguity of the area east of Jerusalem. In that sense, it is profoundly unhelpful to the peace process, and we will continue to argue that. I believe that it is one of the issues that causes greater disturbance, but there is no excuse for violence on either side in resolving a political discussion.

Lord Wright of Richmond: My Lords, can the Minister confirm how far the planning and construction of the so-called security fence has been realigned in line with both international opinion and the Israeli courts, or does it still encroach deeply into widely acknowledged Palestinian territory?

Lord Triesman: My Lords, the first thing to say about the barrier is that, in the view of the Israelis, it reflects their right to self-defence. We are concerned about the route of the barrier because it is clear to us that some of it remains on occupied territory. It is true that there have been some adjustments as a result of rulings in the Israeli High Court, but that has not brought it back to or behind the green line. For those reasons, we still believe that its route is illegal.

Lord Wallace of Saltaire: My Lords, does the Minister agree that part of the tragedy of the Arab-Israeli conflict over the past 30 years has been the deep ambiguity in Israeli policy, often supported by authoritative voices in Washington, between a two-state solution and a one-state solution in which the West Bank is incorporated into Israel? Does he also agree that we have to say loudly and clearly not only to the Israeli Government but to their supporters in Washington and in the Bush Administration that a two-state solution with a viable Palestinian state is the only way in the long run to provide for a secure Israel in a peaceful Middle East?

Lord Triesman: My Lords, I wholly agree: the two-state solution is the only solution. The prospects for any peaceful settlement in the region will be very poor without the two-state solution, and that must mean that the two states are both viable. I agree wholeheartedly. When we call on Hamas or others to adopt and accept all the conditions of the road map, we are asking them also to accept the two-state solution as fundamental.

Lord Dubs: My Lords, does my noble friend agree that there is increasing concern about the policies of the American Government, our Government, the EU and the Israeli Government towards Hamas? Having argued for years that democracy was essential in many parts of the world, are we not undermining that argument by trying to ostracise Hamas and make demands of it that it possibly cannot meet immediately, given that it appears to have implemented an effective ceasefire for the past year?

Lord Triesman: My Lords, of course we must respect the outcome of democratic elections—that is fundamental to any democratic process—but I do not think that it is unreasonable in any part of the world to say to those who are elected that with election comes responsibility. There is a responsibility to meet previous agreements and obligations, including those of the road map, which we urge on both sides. It is absolutely clear that the fact of being elected is not a licence to continue any kind of violence, and it is far from clear that the ceasefire has been wholly and objectively sustained.

Lord Dykes: My Lords, I thank the Government for being so strong on these matters and reminding Israel of its solemn obligations under international law. Will the Government have yet another go at reminding the United States of its equally solemn obligation not to be biased towards Israel but to be neutral with regard to Israel and the future Palestinian state and to respect international law by calling on Israel to withdraw to the green line?

Lord Triesman: My Lords, there is consistent discussion in the quartet—I know that the noble Lord will be aware of it—aimed at trying to ensure that we are all aligned with the same policies. In a way, it is a matter of having the right sentiment or frame of mind in dealing between two parties. It is perhaps even more important to ensure that everyone sticks to the formal agreements that are written down—they are clear beyond peradventure—and to which everyone has given their assent. If all parties in the quartet were to do that consistently, we would be likely to see more dynamism in the peace process.

The Lord Bishop of Rochester: My Lords, have any discussions taken place with Hamas on its policy regarding Palestinian Christians? Like many others, I have seen slogans, particularly in Gaza, which say things like "First the Saturday people and then the Sunday people".

Lord Triesman: My Lords, we have strenuously urged on all those in the Palestinian Authority—Fatah prior to Hamas—support for human rights, including the rights of religious practice. We have funded programmes to demonstrate our support for those rights, and we will continue to do that wherever we can have that discussion.

Lord Howell of Guildford: My Lords, following the questions of the noble Lords, Lord Avebury and Lord Dubs, how are the Government going to cope with the rapidly emerging dilemma of the Palestinian Authority desperately needing cash and forming a government who do not even recognise the two-state solution, let alone the borders between Israel and anywhere else? Is there not a need to mobilise other Arab states and Gulf states, all of which are rolling in cash with vast amounts in surplus? Could they not help to finance the Palestinian Authority more effectively? That would ease the dilemma that the Government will have to face.

Lord Triesman: My Lords, it is difficult for me to answer for what other states in the region should do, whether they have a lot of cash or not. Yet we can answer for what we and the EU do. We believe that the authority had made good progress; it warranted full disbursement of sums. The World Bank said so, as a result of its judgments made on progress against all the established benchmarks. As a result, the European Commissioner for External Affairs announced on 27 February that the European Commission would provide €120 million in emergency aid. That is being supplemented in various ways; we are making contributions through NGOs and others to assist the humanitarian effort. If others were to assist that effort, it must be to the benefit of the region. Unfortunately, we do not hold the end of a lever which is cabled at its other end to them.

Business

Lord Davies of Oldham: My Lords, my noble friend Lord Hunt of Kings Heath will repeat a Statement on occupational pensions following the debate in the name of my noble friend Lady Gould of Potternewton.

Business of the House: Debates Today

Baroness Amos: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the debates on the Motions in the names of the Baroness Gould of Potternewton and the Lord Harrison set down for today shall each be limited to two and a half hours.—(Baroness Amos.)

On Question, Motion agreed to.

Women

Baroness Gould of Potternewton: rose to call attention to the progress made by women in the United Kingdom and abroad; and to move for Papers.
	My Lords, I am delighted to once again be opening a debate to commemorate International Women's Day, albeit a week late. I would like to thank my own party group for giving me the opportunity to do so. Before I move into my speech, which is based mainly on UK events, I want to ask my noble friend Lady Amos, who I am delighted to see will be replying to this debate, whether it is true that UNIFEM is going to be ruled out as an organisation because of UN restructuring. I have been specifically requested to ask that.
	Within the past year, we have celebrated the 30th anniversary of the Sex Discrimination Act 1975, alongside the Equal Pay Act 1970. Yet I believe that in order to judge any progress that women have made, it is necessary to put into perspective the lives of women as they were, say, 200 years ago. So I make no apology for a short history lesson. Women's struggle has been one of battling against a man-made society and against male-dominated structures. Men devised and built the framework of government and society that controlled women's lives. Two hundred years ago, women had virtually no rights at all. They were chattels of their fathers and husbands; they were bought and sold in marriage; they could not vote and when they married they could not own property. At no level of society did they have equal rights with men.
	The turning point came in 1918 when women got the vote. In the latter half of the 19th century there began to be gradual changes in the role of women. Many factory Acts were passed which placed restrictions on hours and conditions of work and married women won the right to own property. The change of attitude to public welfare coincided with the entry of women into the political establishment. In 1939, during the Second World War, nurseries were built so that women could take on men's jobs in factories and on the land. But that sense of freedom was not to last. Post-war, the nurseries were closed down and women were expected to return to the home. But women had realised the importance of economic independence and the number of women going out to work steadily increased. By the late 1970s, there were more than 7 million working women. Fundamental to that independence was the advent of the contraceptive pill and the passage of the Abortion Act 1967. For the first time, women had gained sexual freedom.
	There then began a seesaw of advancement and retreat. With the introduction of the Equal Pay Act 1970 and the Sex Discrimination Act 1975, and with the establishment of the Equal Opportunities Commission, under the chairmanship of my noble friend Lady Lockwood, there was a feeling of great optimism. The Employment Protection Act 1975 made maternity leave a statutory right. One year later, the first Sexual Offences (Amendment) Act 1976 was passed. It was the beginning of a new dawn. Equality was on its way, but there was a blip. Women found that they were particularly vulnerable in times of recession, when the nature of their jobs, their lower skill levels and lack of seniority, and domestic commitments made them more vulnerable to redundancy. In May 1981, the EOC concluded that women had borne a disproportionate share of the increased rate of unemployment. Opportunities for women to continue in full-time paid employment were affected by the reduction in maternity rights under the Employment Act 1980. It was a particularly depressing time after the excitement and expectations of the late 1970s. But a sense of determination and tenaciousness had set in. Women's groups, trade unions and Labour women evolved strategies and made demands for advancement. For the first time, positive action was on the agenda.
	The past 10 years have seen many of the demands made by those women in the 1980s come to fruition. There is now a new language of buoyant confidence and most women feel freer. There is a better balance between men and women at work and in the home. But while women today may be living in a kind of utopia which women in the 19th century could only dream about, that freedom is accompanied by continuing inequality. The gender divide has not gone away. It is incredible that the pay gap between women working part-time and men working full time is about the same as 30 years ago at just under 40 per cent. The full-time pay gap in 1975 was 29 per cent; now it is 17 per cent. The part time pay gap was 42 per cent and is now 38 per cent. Disgracefully, there has been hardly any movement at all.
	There are three main causes for that slow progress towards equal pay—occupational segregation, the effect of caring responsibilities on women's working patterns, and pay discrimination, where pay systems are unfair to women employees. There is a similar picture throughout Europe, where the full-time pay gap is 15 per cent, even though the right to equal pay has been enshrined in the original Treaty of Rome since 1957. The European Commission is critical of member states for lack of progress saying:
	"Although the pay gender gap is recognised as a serious problem, new concrete targets and actions are rare".
	A number of European countries are trying to look deeper into the cause and here in the UK we welcome the report of the Women and Work Commission chaired by my noble friend Lady Prosser and await with interest the response to its 40 recommendations.
	One of the consequences of occupational segregation is that there is a clear correlation between those sectors where women are under-represented—women engineers and women working in construction and plumbing—and where there is a skills shortage. About 70 per cent of women with SET qualifications are not working in SET professions. The economic benefits of SET professions in eliminating job segregation and closing the pay gap are obvious. They enable women to reach their full potential, make a significant contribution to ending child poverty and end the cycle of lifetime inequality that results in women's poverty in old age. The Women and Work Commission report estimates that the UK economy would benefit by up to £23 billion if women's participation in the labour market was increased.
	The Sex Discrimination Act gave women formal equality, but that formal equality is a thin veneer that all too easily shatters as soon as caring responsibilities come along—caring for a child or for a disabled adult or older relative. Studies have shown that in the 1970s fathers with children under five devoted less than a quarter of an hour per day to child-related activities, but that figure is now two hours per day, which, of course, helps. Nevertheless, women all too easily end up on the money track, restricted to low-paid, part-time work, which is a particular problem for single mothers.
	The Work and Families Bill is an important step in giving carers the right to request flexible work, building on the current right for parents with children under six, almost a quarter—22 per cent—of whom have requested to work flexibly since that measure was introduced. We look for that to be further extended to include all workers. There is overwhelming support for more flexible working patterns from both employees and employers, all of whom benefit—400,000 men have taken paternity leave. The evidence shows that eight out of 10 fathers want to spend more time with their children but, at the current rate, cannot afford to do so. We also look to the further increase in paternity pay.
	There are 10 million carers in the UK. The indication by the Secretary of State for Work and Pensions that there will be an introduction of weekly credits for women carers is welcome. If ever women were penalised for caring, it is in the way in which they are currently treated by the pension system in retirement. One in five women faces poverty in retirement. Women's income is just 57 per cent of men's and 2.2 million women are not accruing rights to a basic state pension. The pension system was designed for a different era, when men went out to work, had jobs for life and wives stayed at home, dependent on the men for their pensions. That is the past. A fragmented working pattern is now the norm and not the exception. Women are badly served by the outdated pension system. The Government's pension credit system has delivered for over 2 million women but, ultimately, equality can be achieved only by a fundamental change to the pension system, about which I am sure we shall hear more from my noble friend Lady Hollis.
	Earlier this year the EOC produced its annual review, Sex and Power: who runs Britain? 2006, which shows that, while women have made great strides in the past 30 years, the divide is still stark. At the current rate, it will take another 20 years for women to achieve equality at top levels of the Civil Service. There are only three women at Parliamentary Secretary level, with only 25 per cent of top management posts being occupied by women. There is only one female CEO, only 13 per cent of women directors in the FTSE top 100 companies, leading the EOC to identify that it will take another 40 years to achieve equity with male directors, and 96 out of 100 company directors are men. We should be concerned that it is expected that new female directors on top boards are more likely to come from outside the UK, having had previous board experience and a more varied background.
	Historically, the criminal justice system has been a particularly male-dominated part of our legal system and still is. It would take 40 years—another 40 years—to achieve an equal number of senior women in the judiciary. There is only one woman Law Lord in your Lordships' House. We look to the new judicial appointments system and hope that we see a fairer method of appointing judges, resulting in more women and ethnic minority judges, perhaps accompanied by a sentencing policy and practice that responds more appropriately to the needs of women offenders. I could go on—93 out of 100 university professors are men, 95 out of 100 general surgeons are men—but perhaps the most disturbing figure of all is that it has taken 88 years to reach the figure of 126 women MPs. At that rate of progress it would take 40 more general elections, another 200 years, for there to be an equal number of male and female Members of Parliament. That process, I hope, will be speeded up with the Labour Party continuing its programme of positive action and the main Opposition developing its proposals to get more women candidates standing for its party. Therefore, I am a little disappointed—I say this with regret—that there are no Back-Bench speakers on the Opposition Benches putting forward their proposals for the future advancement of women.
	Some might argue that the number of women MPs does not matter. However, greater numbers of women not only makes the other place more representative of society but suggests that their impact cannot be denied. Since the influx of women in 1997, issues such as violence against women, childcare and work-life balance have moved quickly to the top of the political agenda. As well as those achievements, credit must also go to the Labour Government for many other positive changes, including generous maternity pay of £106 a week, increased maternity leave, paid paternity leave, the right to request flexible working, the national minimum wage, the national child strategy and, importantly, as I repeat, tackling violence against women. All those are measures designed to promote equality for women.
	The working tax credit has enabled half a million mothers to choose to stay at home with their children for longer, and we will soon see a new duty on public bodies to promote sex equality—perhaps the biggest step forward for sex equality in 30 years. It is bold, forward-looking legislation, in which responsibility lies firmly with the organisation and not the individual.
	Those are real achievements, but there is still more to do. We need to continue to put support for parents and carers at the heart of our agenda. We have to establish a fairer system of pensions. We have to change the culture in the workplace by creating more high-quality, high-paid, flexible and part-time work. To address the inequalities that still exist 30 years after the introduction of the Sex Discrimination Act 1975, we should ensure positive action in political parties and the workplace. We need to explore the role of the private sector in promoting equality; the duty to promote sex equality should not be limited only to the public sector. That is an issue that the forthcoming Discrimination Law Review should consider, and these are questions to think about as we consider the draft Single Equality Bill, creating a modern legal framework for the 21st century. I believe that that is the challenge ahead.
	I close by stressing that establishing equality for women also ensures a greater freedom and equality for men. In the words of Emmiline Pankhurst, we have to free half the human race—the women—so that we can help the other half. I beg to move for Papers.

Baroness Lockwood: My Lords, I am very grateful to my noble friend for introducing this debate and thereby enabling us to look at the progress of women in its historic context. It is so easy to forget what change has been made and to take the change and the progress for granted. I recall as a very na-ve young woman hearing a speech by a remarkably able woman suffragette about how the vote for women had been won. I remember saying to her, "You did everything—there is nothing left for us to do". I soon learned how wrong I had been. Not only did equal pay and sex discrimination begin to come into focus but, just as those pioneers had won the battle for women's suffrage, we needed to consolidate women into politics. That is a mountainous task with which we are still struggling, as my noble friend indicated, although there has been some progress in the past decade.
	Looking back to 1975, the task facing the new Equal Opportunities Commission, of which I was founder chairman, was enormous, and spanned the whole range of political, economic and human activity. The remit was to eliminate discrimination on grounds of sex and to promote equality of opportunity. The tools were: legal enforcement through the tribunals and courts; establishing case law; introducing codes of practice; making recommendations to government on changes to the law; formal investigations; and education and persuasion—the latter two being of great importance. With a limited budget, the commission's strategy was to act as a catalyst on all other institutions and policy makers. Our tactics were to establish precedents through the courts and to use those precedents in our enforcement and educational work. Some early cases of indirect discrimination revealed a whole range of unexpected and unintended practices and problems arising from a male-dominated culture, which we are now beginning to tackle.
	However, many of the consequences remain with us and have shown up new challenges. The prime challenge today is how to balance the essential economic and social aspects of women's and men's work and family life in a more equal sharing environment. Having accepted this as today's norm, I was nevertheless surprised at an ICM poll for the Equal Opportunities Commission showing that 59 per cent of those questioned thought it harder for working women to balance their work and family lives than it was 30 years ago, and 45 per cent of men and 36 per cent of women thought it harder for men to balance their work and family lives than 30 years ago. My surprise was not that women and men are finding this difficult, but that they were comparing it with the completely different culture of 30 years ago, when these problems were just beginning to emerge.
	The lifestyle at that time was that men worked and women were the homemakers. Of course, even then there were exceptions. There were exceptions in some industries, where women worked for the majority of their lives, such as in my native county of Yorkshire and the textile industry. However, the accepted lifestyle was of the male worker and the female home worker. Today's young person of either sex would be completely unbelieving to be taken back three decades to a time when the Sex Discrimination Act first became law.
	Then girls were seen to be of less importance than boys in education. After all, they would probably work for a few years upon leaving school, then marry, have children and be provided for by their husband for the rest of their life. If he died before them, which was most likely, his pension rights would provide for her, unless there had been a breakdown in the marriage previously, when women would be completely unprotected.
	Girls were behind boys in O-levels and, even more so, at A-level. At university, only 35 per cent of students were women; now it is something like 55 per cent. Anticipating the new Act in 1974, the medical and veterinary schools abandoned their informal quotas of a maximum of 12 per cent of female students—it had been felt that a profession could not cope with more women than that. Fewer than 10 per cent of lawyers—both barristers and solicitors—were women; so too with accountants and the majority of other professions, except of course nursing and teaching. A woman vice-chancellor was unheard of, women were regarded as too lacking in gravitas to be newscasters and even the few women who had made it into journalism were not allowed to stand at the bar and talk over the latest news items with their male colleagues in the Fleet Street pub, "El Vino", until after the successful sex discrimination case in 1982. Women were not allowed into the majority of clubs, except as guests in specially reserved areas, and they were not expected to get mortgages and other loans or credit in their own right.
	I recall that when I came to London to take up a new post, I went into the local departmental store to open an account. I was asked to provide a male guarantor. When I protested that no male could guarantee my income, a sprightly young man appeared and said, "It's alright, madam. I'll sign the form for you". With as much dignity as I could summon, I said, "Thank you very much, but I will take my business elsewhere", and left. That was the kind of indignity that women had to put up with. We were certainly second-class citizens. Women were not legally responsible for their own tax affairs. Men were automatically classed as head of household. A wife's income was not taken into account in any financial arrangements except after a battle with the authorities, because of course a wife might become pregnant and stop earning.
	Nor were the social structures in place to support married women at work and women's independence. There was no statutory paid maternity leave with a right to return to the job. Paternity leave was a laddish joke. Pre-school childcare was largely confined to voluntary playgroups. Children's allowances started with the second child and were inadequate. Women were not building up their own pension rights; and so one could go on. It was a world unrecognised by today's standards and cultural attitudes and it is important that we do not lose sight of where we came from.
	Of course, not all discrimination has been eliminated. Some most intractable problems remain. Equal pay has not been achieved, as has been indicated by my noble friend Lady Gould and in the report of the commission of my noble friend Lady Prosser on women and work. The pay gap between women and men lies deep in our cultural heritage. The consequences of yesterday's unequal education and training opportunities for girls remain with us. Women's natural function of childbearing will always be with us but it can be and is being accommodated in more focused family policies.
	As we progress and modify our culture, new problems emerge. The issue of life/work family balance linked with women's pensions is the new challenge of the present generation. That is a challenge not for women alone but for women and men together.

Lord Giddens: My Lords, I congratulate my noble friend Lady Gould of Potternewton on having initiated this debate. When I look down the list of speakers I can appreciate the meaning of the term "odd man out". I am also the odd man out in another way because I do not want to talk about the usual stuff such as work and the home, unequal pay or the proportion of women in business or in Parliament. However, it is interesting to notice that the country that has the highest proportion of women in Parliament is Rwanda, with 48 per cent. It is followed by the usual suspects of Sweden and Norway, but it is a remarkable achievement by that country.
	I am sure that other noble Lords will speak about those topics but I do not want to speak about them. I want to speak about problems of the emotions and the identity of women in contemporary societies, especially those of younger women. I would like to introduce your Lordships to Jennifer Hendricks, who lies dying in a hospital bed. She has only a few days to live. She has been in and out of hospital for something like five years. Over that period she has spent only two months out of hospital. She contracted her disease when she was about 14. She is 25 when she dies. She left some notebooks that describe her journey and her ordeal through her illness, which were edited by her father and create a most moving document. It was published as a book, Slim to None: A Journey Through the Wasteland of Anorexia Treatment. Anorexia, bulimia, binge eating and obesity are all phenomena of an affluent society.
	I remember when I became interested in these topics and was reflecting on their importance for the position of women in contemporary society. By chance, on the same day I bought two Sunday newspapers. I do not do that any more because they are much too large, so you have to throw away most of them when you get them. In one there was a picture of an anorexic girl, a white American, emaciated to the point of death. On the front of another was an article about starvation in Africa, including a picture of a girl emaciated to the point of death. Of course, she was black. What struck me about this was that here was the same outcome, with totally different dynamics, in these two situations. In the first case you have someone starving themselves to death in a society which, for the first time, has more food to go around than it can possibly consume; in the other, you have classical starvation, where people die because they do not have enough food.
	Anorexia is rapidly expanding in our society. It is about nine times as common among girls and women as it is among boys and men. It started mainly among teenage girls, but has now spread upwards. We even find people becoming anorectic for the first time in their lives in their 50s. It is also spreading downwards; girls as young as seven or eight are beginning the process of starving themselves. Anorexia and other food disorders are unknown in previous history, although there are examples of saints starving themselves to death. Starving yourself to death, or overeating, bingeing and being sick are mainly secular phenomena of our society, dating more or less from the late 1950s and early 1960s.
	It is calculated that in the United States, for example, fully one third of female college students suffer some form of clinical eating disorder, requiring psychiatric treatment—a massive proportion. A study in Germany followed the cases of about 100 anorectic women, aged 25, for 12 years. It found that only 30 per cent of them recovered over that 12-year period, and even they did not make a complete recovery; they still had problems. Thirty per cent did not recover and the rest were somewhere in between. The death rate among these women was 8.8 per cent, which is about nine times that of women of the same age in the ordinary population.
	So this is quite an extraordinary phenomenon, to which we should add something alarming that goes on in our schools, which also affects far more girls than boys: self-harm and self-mutilation. A study carried out in 2002 showed that a minimum of 11 per cent of girls, across a range of UK schools, self-harm by cutting themselves or self-harm in other ways. Having looked at some of these studies, I suspect that the true proportion is much higher. You do not self-harm in order to display yourself to others; you self-harm as a private affair and a lot of it is hidden. About three per cent of boys seem to self-harm, so this again seems to be a heavily female activity.
	What is going on here? What is affecting so many young women and, increasingly, older women in our society, which somehow intersects with the changes affecting our lives? The interesting backdrop to this is that the position of women in our society does not fit the classical idea of women and inequality; that is, that women have always been unequal to men, they are still unequal to men and that is just how life is. Recent material on this shows the opposite. It shows the amazing progress made by women in most western countries over the past 20 or so years in earnings and penetration of occupations they were not in before. It was said this would be true over the longer term, but this is happening in the very short term now. In education, girls often overtake boys, but thereby become subject to all the competitive pressures this involves. This is very interesting. There is a major secular change to the position of women in our society, and, on the face of it, it is, on the whole, for the better.
	The statistics show that men's average wages increased by 13 per cent between 1997, when the Government came to power, and 2004, whereas women's average wages increased by 31 per cent. This finding is echoed in all the EU countries, with the exception of Italy, and in the United States. Italy seems to be mired in stagnation. It is probably no coincidence that Italy has the lowest birth rate of any country in Europe.
	What is going on here? I think that the pathologies I am describing are actually pathologies of the changing position of women, not of the traditional position of women. It is incumbent on us to take them seriously: they have political and economic outcomes of a formidable and manifest kind. So what is going on? First, you can trace the extraordinary spread of anorexia and other eating pathologies to the rise of supermarket culture, which is the late 1950s and 1960s. I am not blaming supermarkets for this; it is simply the fact that you can get any food you want at any time of the day and you have to construct a diet for yourself based on how you want to be and who you want to be.
	Secondly, this imposes special strains on women. These are the strains of halfway emancipation. Women have been freed from many of their traditional roles and traditional tasks and are able to compete, certainly in schools, very freely alongside boys. As I say, they do better than them in some cases. However, women are still subject to the sexual gaze of men. Women are still judged by their appearance. Women still have major identity and emotional problems which relate to this halfway position—maybe it is even a three-quarter way position—of emancipation. It is important to recognise that anorexia and other eating disorders are active conditions: you have to work at it to get that thin. So, anorectic girls will often go to a gym perhaps every day of the week or monitor their diets very carefully. Think of Bridget Jones, because Bridget Jones is a kind of comic take on what it is like to be a woman in this confusing kind of world when you are struggling with an identity in a partially still male-dominated world but still where you want and expect to be free. A lot of its purchase comes from its comment on that, I think.
	I think there are some policy implications and I should like briefly to close with those. The first is: no going back to the traditional family. Personally, I am 100 per cent opposed to the idea that the traditional family was a happy place for women and that modern societies are causing them strains. It is not the fact of emancipation, it is the halfway nature of emancipation which is causing this very worrying spread of emotional and identity problems. Secondly, politicians and policy makers should take seriously self-esteem and self-identity, because in a more fluid and open society we all have to wrestle with these things. It is not only women. There is a very interesting book called Work to Welfare, which reverses the Labour mantra, which is about men in their fifties who lose their jobs and cannot get jobs again. They have immense problems with self-esteem and self-identity. They do not self-harm in the same way but I think they self-harm in a kind of psychological way.
	I think the Government need to confront some of those problems and integrate them with the very admirable agenda in the report of the women's commission—because they are not very visible there. Most people will recall, I hope, the work of my noble friend Lord Layard, who has recently written about mental illness. He says that the big problem for our society is no longer unemployment but mental illness. You have more people who are mentally ill today, costing the economy about £2 billion a year, than you have unemployed. There is an important intersection between those, because if you want a good job, you have to have self-esteem and initiative to go out and get it.

Baroness Billingham: My Lords, I too add my warm congratulations to my noble friend Lady Gould on initiating today's debate, which allows us to take stock of women's role in society. It is also a pleasure to follow my noble friend Lord Giddens and his extremely thoughtful, as ever, contribution. But I feel that I should share with the House that when my noble friend Lord Giddens and I play tennis together, as we frequently do, he still insists on trying to pinch my volleys. However, I am confident that other speakers will look at areas where women play their part—family, business, politics and indeed all facets of our society—and I shall listen with great interest to their contributions.
	I will concentrate on just one area today—sport. I hope to assess the part that women play in that aspect of our lives. It is, I believe, an area where much has been achieved but where much more has to be done for women to take their rightful place in the complex arena that embraces sport. But why do I think that women should concern themselves with sport? Quite simply, because sport plays such a major role in our society, and because women become second-class citizens by allowing themselves to become marginalised—indeed, patronised. A glance at any TV schedule or newspaper confirms the view that sport is the hottest topic. So can women afford to shrug their shoulders and be left behind? I certainly do not think so, for a variety of reasons. We have never had a more sport-conscious time: we have the 2012 Olympics, the scourge of obesity, and the value of social inclusion—all reasons to take sport extremely seriously.
	I could devote my entire speech to the plethora of virtuous government initiatives, all targeted at improving the active participation of women and girls in sport. Let me say briefly that the Government are alert, sensitive and proactive, and that things are getting better. But when I take stock of current statistics, I must say, in the words of the old Virginia Slim slogan, "We've sure come a long way, baby, but we've sure got a long way to go". So why do I take a rather pessimistic view of the current situation? First, I have considered a wide range of statistics and analysis from a variety of sources, and they do not make good reading. Here is a sample. By the age of 18, 40 per cent of girls have dropped out of sport. Women occupy only 26 per cent of the membership of all sports boards and committees, and make up only 15 per cent of the board membership of all national governing sports bodies. Only 10 per cent of all British coaches who went to the 2004 Athens Olympics were women, and there are currently no female sports editors in national or regional print media.
	There are many more statistics to give, but I think the point is made. It is against that background that the Government have to perform and show that the resources and initiatives that they have channelled into sport are paying dividends. At present, women and girls barely feature on our screens, except for a very few national heroines such as Paula Radcliffe and Kelly Holmes. It is a bit like coming into a tennis match where you are already a set and four-love down before a ball is struck. But I am not totally despondent. The tide is slowly turning. Public opinion is with us, and people are waking up to the fact that the obesity crisis can be solved only by a balance of a better diet and more exercise. Frankly, it matters little what form the exercise takes. Formal sports, swimming, cycling, walking or dancing—all can play their part—but the secret is to get into the sporting habit. Some sports, such as women's soccer, are a steep upward curve. Excellent; let's encourage more. From junior to secondary school, the Government are making two hours of PE per week compulsory. There will be more sport in after-school sports clubs. Excellent, but more is needed.
	But what happens at the end of formal education? Why is there is a huge decline in girls' participation? Here is more analysis. Girls and women have less disposable income than men, and taking part in sport is expensive. They also have less disposable time because of family responsibilities, which take up more of their time than that of their male counterparts. I must say that sport in general is still run by men for men. Female participation is closely linked to social class. The longer a woman is in education, the more likely she is to take part in lifelong sport. As for ethnic minorities, the details are even worse; only 19 per cent of Bangladeshi women participate in any sport, against the national average of more than 30 per cent.
	How can these very depressing statistics be improved? The Government are determined to improve the situation. All grants, whether from Sport England, from the Government directly or from governing bodies, must now have equal expenditure for men and women.The pledge to provide multi-sports complexes in every area will certainly make inroads. These complexes have swimming pools, badminton courts, five-a-side football pitches, gymnastics facilities and so on. They are ideal for families to share their sporting experiences.
	It is on the equality factor that I believe we can learn something from the USA. Two weeks ago, in Florida, I switched on my TV. Among all the weird programmes on endless channels I found no fewer than four channels showing women's sport, and to a professional standard. These were tennis—no surprise there—women's soccer, women's basketball and women's baseball. That would be unthinkable on British television, where the coverage of women's sport makes up less than 5 per cent of sporting programmes.
	So why is the USA so different? I do not have to tell many of your Lordships that the answer is Title IX. In the mid-1970s, a highly controversial piece of legislation was passed in the United States which guaranteed equal funding for all sports for boys and girls in the high school and college system. More than that, it demanded equal coverage in reporting. I know that we do not have a similar system of sporting scholarships in our schools and colleges—although perhaps specialist sports colleges will be a forerunner—but I believe that public service broadcasting has an obligation to give more balanced programming. Yes, in the first instance there may well be viewer objections—but familiarity breeds appreciation.
	I hope that I have not painted too gloomy a picture of the status quo of women in sport, especially to my noble friend Lady Gould—I hope that I have not rained on her parade—but perhaps I may finish on a positive note. Some 10 days ago a tiny bit of history was made: the Lords and Commons Tennis Club voted for a new chairman/captain—and, for the first time in its history, that new chairman/captain was a woman. If we can do that, then anything is possible.

Baroness Dean of Thornton-le-Fylde: My Lords, I, too, thank my noble friend Lady Gould for introducing the debate today. As she said, it is not the first time she has done so; she has almost become the key-holder to this issue for the House, and we are all indebted to her for that.
	We have had similar discussions over a number of years, but very little changes in some respects in the make-up of the House for these debates. I in no way challenge the commitment of both noble Baronesses on the Conservative Front Bench, but I would not feel too lonely if I were them because, regrettably, it is the usual format.
	Demonstrably, much progress has been made by women in society generally and in business, where we are seeing increasing numbers of women not only starting their own businesses—the proportion of women in business start-ups is significantly higher than it has been over the years—but also running large companies. In the professions, more young women are entering training in both the medical and legal fields. This will start to impact and we will probably see more women Law Lords, I hope, in this House. Who knows, we might have a woman Black Rod at some point. That really would be a starter. We are also seeing more women coming forward in the services and running voluntary and charity organisations.
	Importantly, there are more women in public life. Before this debate, I read the debates that took place in another place and in this House that led up to the Equal Pay Act and the Sex Discrimination Act, headed so bravely by one of my heroines, Barbara Castle, as she then was. Those debates really are an education. It is like another age—it was another age. The legislation was passed despite enormous opposition from the opposition Benches, not only in another place but in this House as well. Reading the debates is of great interest. One would have thought that the introduction of the Equal Pay Act and the Sex Discrimination Act would have led to the complete demise of the nation. One was terrified reading about some of the stuff that would happen if we passed these Acts. That did not happen—we had a brave Prime Minister in Harold Wilson, probably held up by Barbara Castle, who was not going to be put off what she intended to achieve.
	That government believed in progress for women, and so does this Labour Government. Since 1997, we have seen substantial change in the area of women. We have seen it, importantly, in Parliament, in the appointment of women Ministers at all levels, be it Secretary of State or supporting Ministers in departments. We see it, too, in this House, on all Front Benches, which is very welcome. Without wishing to sound patronising, the women Ministers in this Government and those whom we have had since 1997 make me feel very proud of the role that they have played in government and in pushing forward policies which have been good not only for women but for British society as a whole. Their performance has been exceptional, and continues to be.
	We have a Government who have been proactive in supporting women, not only in employment but in family support policies. This debate is not just about women—it is about the whole of society. Indeed, who would have thought 10 years ago that we would have had a Bill like the Work and Families Bill?
	We have seen amazing progress since that day in 1974, in the lead-up to the Equal Pay Act, when, as a very nervous young union official, I was asked by the TUC to be one of the speakers in Trafalgar Square. I was terrified out of my wits, but I had enough sense to realise that I was participating in something significant. Of course the media trivialised it. Remember them saying, "Burn your bras"? A lot of our women in factories said to me, "Brenda, if we burn our bras there'll be an increase in industrial accidents in this factory". Despite the media trivialisation, real change was taking place.
	Not only are more women involved but there has been an impact on the way in which we debate things publicly and the issues that we debate publicly. Such issues were felt before to be a bit wimpish—not macho. The nature of the dialogue we are having has changed.
	Economic security and equal treatment in pay are crucial to everyone, not just women. Today, part-time work accounts for something like a quarter of all the employment in the UK. This was trailed in the changing nature of work—instead of the job for life, people are increasingly changing jobs and doing different types of work. More than three-quarters of that part-time workforce is made up of women. Yet, despite the legislation and the progress we have made, proportionately they earn today the same as they did 30 years ago. That is not progress; it is not even standing still—it is going backwards. This was clearly pointed out in the recent report from the Women and Work Commission, so ably chaired by my fellow trade unionist and noble friend Lady Prosser.
	After suffering discrimination in working life and reduced income, many women face a miserable retirement of poverty and deprivation. Much of that is because of the nature of payment, but also because of the pension rules and the structure of our welfare provisions. The Turner report on pensions recommended some key and important changes which, if instituted, would bring some relief to the miserable existence that many women have. It would not be retrospective but would provide the same kind of hope that the Equal Pay Act and Sex Discrimination Act did all those years ago. My noble friend Lady Lockwood, the first chairman of the Equal Opportunities Commission, set out down that path, and the Turner report would provide that opportunity. No doubt the noble Baroness, Lady Hollis, will cover this issue in her important contribution.
	Equal treatment and opportunity are essential. Pensions are critical. I am disappointed that the Government whom I support have not been more progressive in this area. The Turner report is only a few months old. I hope that the Government will make a positive statement about the way forward. I hope that it will not be a triumph of hope over aspiration and that we can make progress. If we cannot do so, it will not be helpful to women.
	Pensions are one of the key issues which we must face today. They will not go away. If it is thought that the Turner report can be buried, a lot of us will campaign to make sure that it is not. Essential though equal treatment and opportunity are, visibility is also an issue. Recognition of the work that has been done by some quite remarkable women is another. The names of many of them are not known. I pluck one out of the air: Octavia Hill. She was the founder of professional housing management as we know it today—of the concept of people working together in their own homes. In my view, she was the founder of housing associations. She was also the real founder of the National Trust and she worked in occupational therapy, so she was an eminent lady in her own right. Her contribution was important because more than 50 per cent of tenancy owners in social housing today are women. The majority of households in Britain are led by women. Housing is extremely important.
	One aspect of visibility which concerns me is this House. Women are not terribly visible in pictures or as statues, or in any manifestation other than the women who work in this Chamber. As many of your Lordships will know, I am interested in, and committed to, the Sylvia Pankhurst statue. I am puzzled as to why a difficulty surrounds a statue of a woman who in my view was the key suffragette—it was not her mother, nor her sister, Christabel. Sylvia was the kind of woman who, had she been in this Chamber today, would have spoken up for the radical policies. Yes, she supported votes for women, but she supported also the full empowerment of women. She lived and worked in the East End. She believed in women having the right to choose and in women's education. She was not going to pack her bags and go when women won the vote. The statue is quite an issue for me, which neither I nor many Members of this House will let go. I am sure that we will find a successful outcome. This House usually gets there through the usual channels.
	I pay tribute to a number of women. Although we have policies and rules, individuals can make the real difference. Eminent examples are the noble Baroness, Lady Lockwood, and the noble Baroness, Lady Howe of Idlicote, who is not in her place today. Another example is my noble friend the Leader of the House, who was at the EOC too. The EOC has pushed for women throughout the past 30 years, sometimes when women's issues have not been fashionable. I therefore regret the indication that its budget will be cut by between 10 and 20 per cent. I hope that that will not be the case. If it is, I suspect that the Government will be given an uncomfortable ride by some of us, because the work that the EOC does today is as essential as it was when it was founded.

Baroness Gale: My Lords, I too thank the noble Baroness, Lady Gould, for again giving us the opportunity to air issues relating to women and marking their progress. I shall speak today about violence against women.
	Violence against women and girls in the United Kingdom is endemic. Almost half of all adult women in England and Wales have experienced at least one incident of domestic violence, sexual assault or stalking. Domestic violence in England, Wales and Northern Ireland has the highest rate of repeat victimisation of any violent crime. In 2003, domestic violence alone accounted for a quarter of all violent crime. In 2002, more than 36,000 incidents of domestic abuse were recorded by Scottish police. In England and Wales, the rate of conviction for rape, with some guilty pleas, has decreased from 32 per cent of cases reported in 1977 to 5.3 per cent in 2003 and 2004.
	Women between the ages of 20 and 45 who experience rape or sexual assault are most commonly assaulted by a current partner or ex-partner. Violence against women is an important matter to government, not only because of the direct harm it causes to citizens, but because of its costs. Professor Sylvia Walby's research, commissioned by the Women and Equality Unit in 2004, puts the cost of domestic violence to public services and the economy in England and Wales at £5.7 billion. The highest health-related cost of violent crime is rape. Violence causes extensive physical and mental damage, the long-term consequences of which represent costs to the health and productivity of the entire nation for decades.
	I acknowledge that this Government have done more than any other government in the UK in recognising forms of violence against women as public policy issues. They are the first government to deal with domestic violence, trafficking of women, sexual offences and prostitution. Yesterday, they launched a new campaign to get men to accept responsibility. I understand that the campaign is aimed primarily at 18 to 24 year-old men and will run in lads' magazines, in pub restrooms and on the radio. This is a really good campaign which shows once again that the Government are prepared to take action to protect women. Is it not time for them to implement a comprehensive strategy to address all forms of violence against women, building on the valuable work they have already done?
	I declare an interest as the commissioner for Wales on the board of the Women's National Commission. One of the commission's priorities is violence against women. It is the only issue that has been continually identified by its partner organisations as both a cause and consequence of women's inequality. The experience and fear of violence impact on every aspect of girls' and women's lives, from their education to their employment and health. Breaking the cycle of violence should start at an early age.
	I mention an organisation based in south Wales called Black and Asian Women Stand Out. It works mainly with black and Asian women in Cardiff, Newport and Swansea. One of its innovative schemes is Mentoring Boys. This is aimed at young boys whose mothers have been victims of domestic violence. The boys are mentored by older men, who act as good role models and take them to play football, see a film or take part in other activities. The scheme teaches them that there are good men who respect women. This is one way of breaking the cycle of violence in families.
	The Women's National Commission's working group on violence against women has joined more than 50 other organisations across the women's sector to establish the End Violence Against Women coalition campaign. The coalition's message is clear: violence is gendered, and it is possible to stop it by placing it firmly on the equalities agenda as both a cause and consequence of gender inequality.
	The coalition's campaign goals are to gain a commitment from the UK Government and the devolved Administrations in Wales and Northern Ireland to devise and implement a strategic approach to violence against women. Its ultimate ambition is to end all forms of violence against women in the UK and to place violence against women firmly on the equalities agenda, making prevention central to the response; and to raise awareness of the true nature of violence against women in the UK, the levels of violence, the different forms of violence, and the impact on individuals, families and communities.
	I warmly welcome the statement by Fiona Mactaggart, a Minister at the Home Office, on the prostitution strategy. Like her, I can imagine a world without prostitution. I can also imagine a world without any forms of violence against women. There is a need to ensure that the issue of violence against women is woven into the government machinery through an integrated approach, and to ensure a sustainable and continued movement over the decades which will be needed to prevent what Kofi Annan has referred to as,
	"perhaps the most pervasive, yet hidden, human rights abuses".
	However, it is clear that overall there is room for improvement, in particular in recognising violence against women as an equality issue and in changing attitudes which condone or tolerate it. If governments in the UK were to adopt a strategic approach, it would streamline programmes creating better, more efficient and holistic public services. That would improve immeasurably the experience of women on the ground. It also has the potential to provide massive savings for government in the long term because of the £23 billion cost in England and Wales in relation to domestic violence. In addition, it would mean that the Government had a built-in vehicle to spread the news about the work they are doing. The Government have a good story to tell in many areas but they have no coherent narrative on violence against women at present.
	The Government have recently consulted on the development of a gender equality duty to tackle systematic discrimination. This is a great opportunity. Despite that, the consultation document has failed to outline the nature and extent of gender inequality in society today, including gender-based violence. The experience of members of the coalition is that there is a limited awareness among public bodies about the discrimination which women experience and of how violence against women is part of this. Without such an understanding public bodies will not be able to implement the duty effectively. Furthermore, there is a danger that promoting equality of opportunity between men and women will be misinterpreted by public bodies to mean "same treatment", as opposed to "appropriate treatment" according to different needs.
	It is mainly men who perpetrate violence—and we should not be afraid of saying so, nor to gear services to deal with these realities. However, the Government have decided to make their work on violence gender-neutral—unlike Scotland, which has set up a cross-party group on men's violence against women and children which focuses on issues of rape, domestic violence, and physical, emotional and sexual abuse in the areas of prevention, protection and provision.
	Moving towards equality between women and men requires ensuring that they have the same opportunities. That can be achieved only if we analyse and address existing barriers. Research has shown that violence against women continues to constitute a significant barrier. The Government are trying to deal with violence against women. For women to be truly equal and to be able to live in a society where fear of attack, both physical and sexual, is removed should not be regarded as Utopian. It can become a reality. I believe that it will take some time to achieve the aims of the campaign to end violence against women, but it can and should be done. I hope that my noble friend the Leader of the House will consider how the aims of the campaign can be achieved. I look forward to her response today.

Baroness Greengross: My Lords, I add my congratulations to the noble Baroness, Lady Gould, on initiating this important debate. At the same time, I extend my apologies to the Lord President of the Council. I have to leave before the end of the debate due to a prior engagement about which I could do nothing.
	First, it has taken a long time for the situation of older women to gain some priority alongside younger women. The feminist movement, which did so much, largely forgot older women for many years. Thankfully there are now initiatives, not least some by the Government, which help to ease the situation. However, stark facts about the change in our society affect older women dramatically. For example, in the new stretched family one often has a woman, perhaps in her fifties or a little older, looking after one, and sometimes two, generations above her and one, and sometimes two, generations below her. That is a caring role which was completely unthinkable in the not too distant past. The support systems for such care are still somewhat lacking.
	Secondly, older women suffer far more from chronic disease than younger people, and often than older men. We still have a gap in longevity between men and women. That will continue for some time although the equality gap is narrowing. However, at present one could say, I think with some truth, that a lot of older women live longer in more pain. They are poorer and suffer more. Something has to be done to arrest that shameful situation.
	Thirdly, I acknowledge that there has been a large input of cash into healthcare. However, there are still areas in which women, in particular older women, suffer through not getting the attention they need and through blatant discrimination. For example, we tend not to recognise that cardiovascular disease affects more women than cancer does. We always tend to focus on men being likely to be sick through cardiovascular disease. It is an area which needs a lot of our attention.
	Chronic disease is mostly suffered more by women than men. The cash problems suffered by the NHS mean that in the commissioning of healthcare the primary healthcare trusts will concentrate on the more acute needs of people to the detriment of the chronic, lower order care which is needed by many people in the community. That will disproportionately affect women in the community. I hope that the Government will address that worrying trend.
	I shall not attempt to address the issue of social security. The noble Baroness, Lady Hollis, will do so admirably. It is a huge problem. I refer to the role of grandparents, in particular grandmothers and other extended kin. They save the nation a fortune by stepping in and taking on often full-time care of their grandchildren—and they may not be blood grandchildren. Most of the people who do this caring job are women. I would even say that they are used by some social services or authorities because they do not get the support they need. Some have to spend a huge amount of money which they do not have or which reduces their income to unacceptable levels. We are talking about children with immense problems. We know that families often split up. Grandparents step in but they are treated terribly unfairly in relation to other carers such as foster carers or adoptive parents because they are family. That is gross discrimination. I should love to speak for a very long time but, in the circumstances, I keep my speech very brief.

Baroness Hollis of Heigham: My Lords, I too thank my noble friend Lady Gould for securing this debate today and congratulate her on it. She finished her inspiring speech by referring to Emmeline Pankhurst. Not long ago, many of us—including, we were delighted to see, the noble Baroness, Lady Morris—were clustered rather damply under umbrellas in the teeming rain around Emmeline Pankhurst's statue. Subsequently, in a Question on Women's Day, I think the noble Baroness, Lady Morris, was delighted that Emmeline Pankhurst had finished her life as a Tory Party candidate. What she did not share with the House is exactly why Pankhurst made the move she did: she was ardently opposed to birth control, because she wanted purity for men rather than more promiscuity for women. Why that took her into the Tory Party, however, escapes me.
	To return more obviously to the topic of today, women have three-quarters of the earnings, half the income and about a quarter of the pensions of men. Women's working lives and pension prospects are riddled with risk and uncertainty. I want to narrate one such life. A person partners, marries, has children, separates, divorces, is a lone parent, re-partners, and then in older age has a frail and increasingly elderly parent. That is not an untypical life nowadays.
	If the owner of that life was Joe, throughout all those moves he would have stayed in work full-time and built his pension prospects. Whatever was happening in his private life would have had little or no effect on his public life, except perhaps to make him miserable. Having children, he would none the less continue to save for his pension. On divorce, he would probably not have been caring for the children. Becoming a carer for an elderly parent, he would still have remained in full-time work, as the stats show. At any point at which you examine Joe's life, as a series of snapshots at 27, 37 and 47, you could have predicted—subject to his not having a calamity—his pay and his pension.
	Instead, let us say that that life belonged to Joanne. Apart from marrying, every other of those interventions in her life would have affected her work and her pension. If she had children, she would have been only marginally connected to the labour market, a point I shall return to. If she divorced and then became a lone parent, she would take an earnings hit and a pension hit. If she went on to care for an elderly relative, as the noble Baroness, Lady Greengross, mentioned, her earnings and pension would again be hit. Every one of those interventions would have affected her capacity to support herself, as well as to go into retirement with a decent income.
	In other words, where Joe's life can be seen as a series of snapshots, and his prospects change barely at all over time—subject to him not being involved in a motorbike crash, or whatever—Joanne's prospects are riddled with uncertainty. Unlike Joe, she could not have projected at 27, 37 or 47 what the next 10, 20 or 30 years would bring; whether she would marry, divorce, have children or be a carer; or what her state pension would be, and therefore whether it was worth saving for a second pension on top. The woman whose life is most riddled with risk and uncertainty is also probably the person with least knowledge and least leverage to do anything about it. As a result, for making decent choices all the way down the line to combine her work with her caring life—choices that she wants to make, and that society wants her to make—society then punishes her for insisting she takes an earnings hit by doing part-time work and a pension hit. She gets punished for doing what is right.
	The first step is her earnings hit. Many here today have mentioned the shocking fact, first produced by the EOC in its report, Part Time Is No Crime - So Why The Penalty?, and reproduced in the Prosser report, that women who go into part-time work take a 40 per cent earnings cut. What is more, 15 years later, if they go back into full-time work, they have still not recovered from that part-time earnings hit, sometimes because they have been clustered in the low-paid jobs in the five "c"s: catering, cleaning, clerical, caring or cashiering. That part-time work is a positive choice, but it limits the jobs they can do. It almost certainly means that they perform under their skills level, and they usually work close to home to combine it with childcare. As a result 5 million women work part-time, 2 million of whom work below the lower earnings limit, which would build up their stamps for their pension. By making what they and we think is a decent and compassionate choice, juggling their work and life by going part-time, their earnings and pension are hit.
	While still caring for dependent children, as the noble Baroness, Lady Greengross, said, the woman may also be caring for her parents. There are now more people living over 80 than under five. A quarter of all women today will live to 93. By 2030, the average life expectancy of a woman reaching 65 is likely to be 90. Four generations may therefore pivot around her health, her care and her work: her own children, her own generation, her parents entering retirement and elderly grandparents entering their 90s. In consequence, she will not only have taken an earnings hit through part-time work with a 40 per cent penalty all her working life, she will take a pensions hit as well, because pensions have been designed by men in full-time work for other men in full-time work.
	As my noble friends have said, in the Beveridge system, the man was expected to work at his job for 40 years or so, while the woman was expected to work at her marriage for the same amount of time and consequently could derive her income and then her pension through him. Now half of all marriages end in divorce, and by 2030 half of all older women between 45 and 65 will not be married. They may be single, cohabiting, divorced or widowed, but they will not be married and therefore not getting the spouse's pension, and their caring responsibilities will have prevented them from earning a pension in their own right.
	That combination of fluid family forms, which have removed her right to a spouse's pension—the "halfway emancipation" that my noble friend Lord Giddens talked about—the flexible labour markets, which have corralled her into low-paid part-time work, and increased longevity, which means she is taking on more and more caring responsibilities at the very point where government and society urge her to come back into the labour market full-time to build up a pension, mean that she cannot have it all, and she certainly cannot do it all. What she will almost certainly do is ensure that she builds up poverty for her old age in retirement because she does what we as a society want her to do, which is to put her family first.
	Joe, at 27, 37 and 47, knew what his pension prospects were likely to be. Joanne could not possibly have known what her life narrative was going to be, or what her attachment to the labour market, her caring responsibilities or her pension would be. I believe that we have come a long way, not just since 1918 but since 1997. I am proud of the legacy of our first Labour Government, who made work pay for women by introducing the minimum wage—two-thirds of whose beneficiaries were women—and by introducing tax credits, which ensured that a lone parent on the minimum wage of £5 an hour took home £10 an hour as income. An unskilled lone parent therefore got paid the same as a semi-skilled or skilled male. Our first Labour Government made work pay. Our second Labour Government made work for women increasingly possible not just through rights to ask for part-time work and maternity pay but through extended child care.
	What will be the legacy for women of our third Labour Government? I want it to be a universal basic state pension in women's own right, which honours, respects and accounts for their unwaged work alongside their waged work. That means not cherry-picking from Turner and doing the bits that benefit men, but introducing the whole Turner package, which benefits women as well and, if necessary, bringing on the Turner proposals for a universal basic state pension faster even than Turner intended. We do not need more tweaks and shopping lists, or more means-testing; we should go for the Turner proposals, which cost the same as the tweaks by 2030, and which will ensure that women like Joanne can predict the pension that they will get in retirement and will have the confidence to build and save for a second pension in the mean time. As a result, we as a society will not ask the Joannes of this world to make choices where, if it is family first, that means herself last.
	I hope that my noble friend will say that she, too, supports the Turner proposals for women, so that the legacy of this third Labour Government will be to transform women's prospects in old age.

Baroness Massey of Darwen: My Lords, I am delighted that the noble Baroness, Lady Gould, has with great passion and panache introduced this annual debate on women, and that others following her have been equally passionate. I look forward to my noble friend the Leader of the House giving her vigorous sisterly response.
	So much has been said already about the progress of women and issues affecting women that I thought that I would try a different angle. I shall talk about some of the qualities in women, which, I think, have contributed to their progress. I thought of having a brainstorm about those qualities, but I am sure that the rules of the House do not allow such approaches— far too frivolous. I have therefore selected some qualities, and I hope that noble Lords will agree with them. I shall illustrate those qualities by reference to a particular woman I greatly admire, who, despite a hard life full of tribulation, succeeded in becoming one of the finest poets of all time—Anna Akhmatova, the great Russian poet.
	Some of the qualities that I shall list have been demonstrated in the examples of progress given today. Let me suggest that women demonstrate courage, tenacity, creativity, hope, passion and vision, and that their progress, whether with regard to women's suffrage, economic issues, education, science, health, the arts, reproductive rights or sport, has relied on these qualities. Of course, some men have these qualities, but that is not the subject of today's debate. Women writers have shown these qualities and have created female characters who have also shown them: for instance, George Eliot or, in modern fiction, Maya Angelou. I am always struck by how good women are at depicting relationships, communities and everyday lives and how events impact on those lives.
	So it is with my heroine, Anna Akhmatova. She was born in 1889 and lived through the Russian revolution and two world wars. She sometimes lived in abject poverty, and suffered ill health from TB and heart disease. She suffered the execution of her husband and the imprisonment of her son for many years. She suffered the banning of her work and prosecution by the authorities. Despite all this, she refused to leave Russia. At one point, she and some of her friends had to learn her poems off by heart and then burn them, such was the terror under which they lived. She reflected on people's inner lives, their joys, sorrows and problems, and on the wider suffering of Russia, her country. She reconciled a passionate sexual nature with devout Christianity and a passionate love of nature with political comment. She was devastated by the impact of wars and the Russian revolution, during which she and other writers suffered much. Yet she could still joke about taking vodka for a heart condition and retain a hope that there was some reason or force behind misfortune. One of her poems says,
	"If you can't give me love and peace
	Then give me bitter fame".
	She spoke with the voice of women, at a time when women in Russia did not have much voice. On the imprisonment of her only son during the terror, she described standing in a prison queue with other women, in the freezing cold, trying to get news of their sons or husbands. A women with blue lips identified her. Akhmatova says that,
	"she suddenly came out of the trance that was common to us all and whispered in my ear (everyone spoke in whispers in those days) 'Can you describe this?' and I said, 'Yes, I can' and then something like the shadow of a smile crossed what had once been her face".
	After 1925, Akhmatova's verse was deemed unacceptable by the authorities, which regarded her as having no function in the new order. During the terror, she was excruciatingly poor, and lived on a diet of mainly black bread and tea. She was thin and ill. A poem written down could have meant a death sentence. She recognised that she had to live through the suffering and give shape and voice to it. A long poem, "Requiem", recounts a journey of suffering and how she would not leave Russia, her country:
	"No, not beneath a foreign sky
	Not sheltered by a foreign wing
	I was where my people were
	Where, alas, they had to be".
	The winter of 1940-41 was very bad for her. Her unpopularity with the authorities was making things worse for her son in prison. Her health had broken down completely. In June 1941, Hitler marched into the Soviet Union. She felt at one with the Russian people, partly because of this terrible event. In September 1941, she addressed the women of Leningrad on the radio. To quote a little, she said that,
	"this great city of culture and labour is threatened by the enemy . . . my whole life has been connected with Leningrad . . . In Leningrad I became a poet . . . our descendants will honour every mother who lived at the time of the war . . . a city which has bred women like these cannot be conquered".
	Akhmatova embraced fate and used it. She felt that in poetry she could describe, reflect and inspire:
	"Our sacred craft has existed
	For thousands of years
	Even when there is no light
	It has lit up the world".
	Her poetry was banned again in 1944, when it was described as poisoning youth with its pernicious spirit. In 1953, Stalin died, and her son was released from prison. She began to earn some money from translations. In the mid-1950s, she was beginning to reflect about death. In an exquisite poem, "Seaside Sonnet", she says:
	"The voice of eternity is calling
	With unearthly, irresistible power
	And the light moon spills its radiance
	Over the cherry tree in blossom".
	In another poem of this time, she wrote:
	"You will hear thunder and remember me,
	And think: she wanted storms".
	Storms she had.
	In 1965, however, Akhmatova was awarded the degree of honorary D.Litt by Oxford University. She died in 1966 after a life of immense hardship, partings, struggles, hunger, desolation, and despair. But the spirit of this woman lived on. Courage, tenacity, vision, creativity and hope—the qualities identified earlier—lived on. As she said:
	"I warn you that I am living for the last time".
	Anna Akhmatova had spoken for, and appealed to, the ordinary people and they knew it—just like that day outside the prison when she was asked to describe the horrors. The following anecdote reflects how she spoke for ordinary people, particularly women. She was buried just outside Leningrad—now, of course, St Petersburg. One of her biographers describes how some close friends went to her grave to lay flowers ahead of the official ceremony. There was snow on the ground and in it were footsteps, showing that someone had gone ahead. When they arrived at the grave, the person by it turned and went away. The writer said:
	"No-one knew her. She was one of those anonymous Russian women in a grey scarf and a quilted jacket",
	who appreciated what one woman had done for others.

Baroness Northover: My Lords, I, too, thank the noble Baroness, Lady Gould, for securing this debate and for all her work in the field of equal opportunities. This has been a wide-ranging and very moving debate. People have looked at the recognition and representation of women, the pay gap, pensions, women in sport, the different workloads and the implications of family responsibilities. I am becoming very well aware that no sooner do you think your children are grown up than you find that you need to care for your elderly parents.
	The noble Baroness, Lady Hollis, with enormous clarity, pointed to the different life patterns of men and women and explained why, as the noble Baroness, Lady Greengross, also pointed out, so many women end up in poverty. I was profoundly depressed not only by what she said but also by the incredibly perceptive contribution of the noble Lord, Lord Giddens. As my bouncy, slender 12 year-old enters her teens in 12 days' time, will she fall prey to what the noble Lord identified as the pressures of social change? Does anorexia await her? What will her future be? Will she, like Joanna, end up in poverty? That is certainly not how she views her future. So change needs to be faster and more fundamental—not half-hearted.
	I know from bitter experience how thankless a task pushing for such change can be. I was chair of Women Liberal Democrats as we battled to ensure that more women were elected for our party. I am very glad that during my time we adopted zipping for the European elections—and gained an equal number of women and men in the subsequent elections under PR. In that regard, we are still ahead of the other parties in the European Parliament: 45 per cent of our MEPs are women, compared with 33 per cent for Labour and 8 per cent for the Conservatives.
	Speaking personally, I admire those who ensured that the Labour Party adopted women-only shortlists. I could see very clearly what a difference that made to the House of Commons. As others have pointed out, there was that critical mass that made the difference on so many of the issues that we have heard about here. I was very angry, but not at all surprised, that the press made the gibe about "Blair's babes". I thought that that was typical, but I note that women journalists got just as angry about it and I welcomed that.
	Our party apparently has the problem of not really knowing where it is going to win seats, and therefore sorting out twinning and pairing is difficult. As in all parties everywhere, there is fierce controversy over the so-called "fixing" of things for a fairer outcome. But, for me, that is no excuse: Labour now stands at 28 per cent; we have all sorts of mentoring and places on the shortlists but no guaranteed provision, and we moved from 10 to 16 per cent in the last election; and the Tories remain on 8 per cent. For me, that is insufficient progress in the 21st century.
	I have always been absolutely certain—I have the flak-jacket to prove it—that, unless we do something to level the playing field, we will simply not end up with sufficient representation of half the population. I admire what the noble Baroness, Lady Gale, managed to achieve in Wales, and I draw support from those in other parties who are fighting the same battles as us. When we have been ahead of the party opposite, I hope that the measures we have used have helped it in its battle. Labour in the Commons is clearly ahead of us right now and its battles help us.
	The Speaker of the Lesotho Parliament recently pointed out a couple of things to me. She told me that only in Lesotho and the UK was the second Chamber partly hereditary. The second Chamber in Lesotho has a number of chieftains in it, and the only women among them are the widows whose sons are still children. She asked me what we could do about hereditary and appointed Chambers in this, the democratic 21st century. What could I, as an appointed person, say? Secondly, she asked me what we were doing to ensure that women were elected to our democratic institutions. It is embarrassing, to say the least, to discover that a patriarchal country like Lesotho ensures that women are elected in local elections, and yet in this country we tiptoe around on eggshells on the subject. She rightly took me to task on that.
	As the noble Lord, Lord Giddens, said, it used to be only the Scandinavian countries that were ahead of us in this area. But now the UK is 50th on the list of countries in terms of the proportion of women in Parliament, with 49 others—countries such as Rwanda, Belarus, Vietnam, Croatia, Latvia and China—all ahead of us. We would not even be at that position were it not for Labour's women-only shortlists.
	A while back, I attended, with the noble Baronesses, Lady Gale and Lady Flather, a conference of European and Middle Eastern women parliamentarians. The Middle Eastern women looked to us to help them as they sought to ensure that their rights were realised, and they were astonished to hear from us how difficult it still was. Given the astonishing number of Parliaments that look to how we organise things, we have a responsibility, wider than the UK, to move things forward on this issue.
	It is the "abroad" part of this debate that I especially wish to address, and I think that I am the only speaker to do so. For us, it matters a great deal with regard to policy and equal opportunity that our Parliament should be better balanced in terms of gender, that women should have equal pay and that other inequalities should be addressed. But the position of some women around the world in the social pecking order is actually a matter of life and death. Let us take the problem of AIDS.
	In sub-Saharan Africa, 80 per cent of 15 to 19 year-olds who are HIV-positive are girls and women. That is very, very significant in terms of the issues that we are talking about. The pandemic is propelled by gender inequalities and the denial of rights to women. Girls often do not have a choice about whether they have sex. They are expected to be faithful; men and boys are often not. A married woman is not in a position to demand that her husband uses a condom, and he does not. UNAIDS lists marriage as a risk factor for HIV. Nor does the married woman have much influence over whether her husband sleeps with other women, and she is therefore extremely vulnerable. In very poor societies in particular, sex is sold for food, education and shelter, and older men often think that they are entitled to sex with young girls. I was stunned recently to hear an African Minister pride himself on his contribution to the reduction in the incidence of AIDS in his country. He said that he "no longer availed himself of young girls".
	In one study in India, more than 90 per cent of the HIV-positive women were married and monogamous. The same pattern could be found in Thailand and elsewhere. This is a key issue. When I first discovered that, I felt very angry, but I wondered whether I had the right to that anger. Was I judging people by different cultural standards? I have now met many African women—HIV-positive and not—who reject the inferior position dealt out to them and who argue that this epidemic cannot be tackled without tackling gender inequality. I support them in that anger.
	Mary Robinson, the former Irish President, is surely right to say that rights for women are human rights. They are absolute and brook no cultural interpretation. If we are to tackle AIDS effectively, we must begin by placing the rights of women at the centre of our response. If anything positive is to come out of the disaster that is, in particular, hitting Africa, it must surely be on the position of women, which will have to be revolutionised if it is to be tackled effectively.
	Gender inequality is thus not something that we can address down the track, or wait another generation or two before sorting out. We have to make the changes in the UK on which so many in this debate have done so much over many years, but we also have to take that on to a wider stage. We have to support those who are fighting for that millennium development goal of gender equality around the world. The implications of not addressing that are surely unthinkable.

Baroness Morris of Bolton: My Lords, it is a pleasure to begin by thanking the noble Baroness, Lady Gould of Potternewton, for securing this important debate on the advancement of women both here at home and abroad. As you would expect from such a stellar cast, our debate today has been wide-ranging, thought-provoking and moving. There is no doubting the positive and lasting contributions that women have made to society and I pay particular tribute to the powerful women in your Lordships' House.
	Perhaps I may say to the noble Baroness, Lady Lockwood, that I too was that woman who could not raise a business loan without it being secured by her husband. I can tell the noble Baroness, Lady Billingham, that I am very interested in sport, having been a long-time director of Bolton Lads and Girls Club. We have lots of football teams; several of them for girls, with waiting lists and too few pitches to satisfy the demand. In my thanks today, I want to include the noble Lord, Lord Giddens, who has shown that he is well and truly in touch with his feminine side. I was moved by his speech on anorexia and self-harm—areas in which I take particular interest within my brief on children and young people. One big problem there is the lack of access for children to adolescent mental health services.
	I think that the noble Baroness, Lady Gould, was having a slight dig at us by saying that there were no speakers from the Conservative Back Benches. That is not for the lack of some people wanting to speak; this Motion went down quite late in the day and a lot of my colleagues are today at the memorial service for Lord Alexander of Weedon. They may not be here in person, but certainly are in spirit.
	There is so much to celebrate with regard to the advancement of women. Access to good education, innovations in health, better working practices, and serious and dedicated role models have all played their part in transforming life for many women. Yet, for many, life remains hard. Women do two-thirds of the world's work but earn only 10 per cent of the world's income; meanwhile, approximately half a billion of the world's women and girls live in slums. Although UN-HABITAT recognises that there are difficulties for men and women, the nature of a woman's life—providing water and looking after her children—means that the burdens are more acutely felt by women. They also face rape and killing when forced eviction takes place, and widows and daughters whose ownership of property is not recognised find it particularly difficult to escape poverty.
	Here in the UK we are a world away from such extremes. While we are all acutely aware of our own significant problems, a greater recognition of and a willingness to confront challenging and taboo subjects—such as domestic violence, the stark facts of which were brought home to us by the noble Baroness, Lady Gale, "honour crimes", forced marriages and female genital mutilation—has made life more bearable for many more women. Nevertheless, both at home and abroad there is still much to do.
	Last weekend, the phone rang at my home. When my daughter answered, the person on the other end said that they were conducting a survey on behalf of the trade unions and could they please speak to the man of the house who works. My daughter replied that he was not available, but that she could pass him on to the woman of the house who works. Like my daughter, I grew up in a house where my mother worked and so took it for granted that all women worked. I am in awe of women who choose to stay at home, or give up their job to raise their families, often at great financial sacrifice. We should value and support that decision while paying heed to the situation of older women, which the noble Baroness, Lady Greengross, highlighted.
	I return to my mother, who was then very much the exception rather than the rule. She worked from the age of 14 to the age of 68 but because she took some time off to look after me was entitled only to a meagre pension. When my father died, his small private pension died with him; my mother was left with an inadequate amount of money to live on after 54 years of hard work, so she had to come and live with me. That was a great privilege for me, but I am not sure that that was how she saw the end of her working life.
	Today, 12.2 million women work but, some 22 years after my mother retired, women still face real unfairness in pensions. Only 14 per cent of women who are aged 55 to 59 are eligible for a full state pension, while 2.2 million women are not building up even a basic state pension. Here I pay tribute to the noble Baroness, Lady Hollis. I was bowled over by her speech in the debate on the humble Address and she spoke equally persuasively today. The thought of an alliance between her and the noble Baroness, Lady Dean, to take on the Government over the Turner report would be a terrifying one.
	During the general election campaign, David Willetts sought to address that inequality by proposing that people who had taken a career break to look after their children or to care for a relative—who will usually be women, because the burden of care will always fall more heavily on their shoulders—should be able to buy back their pension credit. That idea obviously caught the Government's eye and I am delighted to see that they are adopting it.
	I know I will have support from the whole House in saying that it is outrageous that when a woman is as well qualified and productive as a man she should ever be paid less. As the noble Baroness, Lady Gould of Potternewton, said, one key driver of the gender pay gap is the concept of occupational segregation. Excluding workers from occupations is wasteful of human resources; it increases labour market inflexibility and reduces an economy's ability to adjust and change. So, we on the Conservative Benches were pleased to welcome the recommendations of the Women and Work Commission which tackles so many of these gender stereotypes.
	As my right honourable friend David Cameron said in a speech to the Equal Opportunities Commission earlier this week:
	"Closing the pay gap must be at the heart of our commitment to end inequality".
	He also said that,
	"we want to make sexual inequality history".
	That is why the very first speech that he made as leader was about electing more women MPs. That leads me to a passion of mine which is clearly also that of the noble Baroness, Lady Northover: candidates.
	Men and women are different but complementary. The more enlightened organisations not only recognise that but celebrate it. Talk to the head of any successful company and they will tell you that encouraging and employing women is a critical factor of their success. So it is with politics. I shall quote David Cameron again. He said:
	"I believe that the gross under-representation of women on the Conservative benches short changes not only women . . . but also the Party itself. How can we draw on all the talents of the country when we habitually exclude half the population?"
	In 2001, Iain Duncan Smith rang me to ask whether I would be vice-chairman of the party with responsibility for candidates and the express task of encouraging a more diverse list of them. I thought to myself, "Trish Morris, you've opened your mouth once too often". I shared the job at the beginning with my noble friend Lady Shephard of Northwold. We met the most amazing women but, however good they were, they needed persuading. We were, of course, inundated with bright and talented young men. After all, they had to fill in that awkward gap between university and becoming Prime Minister. Yet women have the perfect skill set for politics—the very qualities that the noble Baroness, Lady Massey of Darwen, spoke about. Their ability to listen, multitask, and deliver on promises are all much-needed attributes in the life of a modern MP, so we redesigned and professionalised our assessment process to capture those very skills, with the result that we more than doubled the number of women on the list and fielded the largest number of women candidates in the party's history.
	If history had been different and we had won all our target seats we would now have 45 women MPs. I will gloss over that for the moment because, sadly, that was not to be, but we are at the start of an exciting journey. I readily acknowledge—as did the noble Baroness, Lady Northover—that we in the Conservative Party have a long way to go. We are way behind the Labour Party and the sight of all the new Labour women MPs on those Benches—the visibility mentioned by the noble Baroness, Lady Dean—gave us all a jolt. However, I am sure that with our new priority list, which will be 50 per cent women and 50 per cent men, we will see the further advancement of talented women in the parliamentary party. More women in Parliament in all parties can be only a good thing.
	Throughout the 20th century and now into the 21st, the perception of both men and women of what women are capable of has been utterly transformed. At the beginning of the 20th century, suffragettes were considered by many—probably the majority—to be troublemakers pursuing a fantasy that women might have a right to vote. What a change we have witnessed, as the noble Baroness, Lady Dean of Thornton-Le-Fylde, mentioned; women are at the very top of politics and taking their leading roles in the arts, education, the sciences and industry. Now at the beginning of this new century anything is possible.
	Because of the achievement of so many outstanding women and the vast numbers who fell in behind them everything is expected. Over decades, the demand for women to be recognised in the UK and the developed world could not, was not and will not be denied. In other parts of the world, local culture seeks to hold women back, expecting women to accept inequality as their due. Now we have set an example which, with modern communications, cannot be ignored within those societies. Surely, we can hope that our freedoms will become universal freedoms and how much better the world will be for that. As the Vice-President of Taiwan, Annette Lu, said:
	"Women hold up half the sky".

Baroness Amos: My Lords, I begin by thanking my noble friend Lady Gould of Potternewton for once again securing an important debate to celebrate women's achievements, mark International Women's Day and point to the challenges that still remain. I am particularly pleased that so many from these Benches participated today.
	I am also very pleased and proud to be answering a debate that has had such distinguished speakers. I hope that the House will forgive me if I say a personal thank you to my noble friend Lady Lockwood who paved the way for many of us, particularly in terms of the important work that she did at the Equal Opportunities Commission. The Equal Opportunities Commission is well served in this House. The noble Baronesses, Lady Howe, Lady Platt and Lady Prosser, have all been commissioners, deputy chairs or chairs of the Equal Opportunities Commission.
	The Government's commitment to securing women's equality—

Baroness Whitaker: My Lords, I apologise for interrupting my noble friend, but she has omitted the fact that she herself was a very distinguished chief executive of the Equal Opportunities Commission.

Noble Lords: Hear, hear!

Baroness Amos: My Lords, I thank my noble friend for that. It would have been somewhat invidious were I to have praised myself in that way.
	I am also pleased about the Government's commitment to securing women's equality and promoting social justice; and not only at home, because key elements in our development and diplomatic work have also focused on the importance of equality for women. When we look at the situation facing women in this country, I am proud of the progress we have made since my Government came into power. Speakers in today's debate have talked about the strengthening of the Sex Discrimination and Equal Pay Acts. We have the national childcare strategy, the introduction of tax credits, the introduction of the minimum wage, the work on securing a better work/life balance, the work on tackling domestic violence and targeted help for pensioners.
	However, I am also conscious of the global challenges facing women. More than 1 billion people in our world live in extreme poverty and a disproportionate number of them are women. Two-thirds of the world's illiterate are women, 60 million girls are not enrolled in school and almost half the 39 million people worldwide with HIV/AIDS are women. The noble Baroness, Lady Northover, spoke about that very powerfully.
	The Government are dedicated to creating a society in Britain in which women and men are able to fulfil their potential and make the most of their lives for themselves and their families in a prosperous, cohesive and healthy democracy. But that task is made considerably more difficult in the poorest countries in the world given the high levels of poverty, lack of capacity and weak governance. Those challenges can be realistically addressed only if women are at the heart of the development agenda. Girls who are educated, even if only to primary level, have smaller, healthier families and, crucially, work to ensure that their own children go to school. Of course, more girls in school leads to greater economic growth and less poverty. That is why the Government are supporting equal opportunities for girls to complete primary education in developing countries.
	We have also seen the disproportionate impact of conflict on women and girls throughout the world. Last week, on International Women's Day, the Government announced a national action plan linking humanitarian, conflict, defence and diplomacy work—all important to conflict resolution and peace building. This House should remember that there were two firsts this year—Africa and Latin America got their first women presidents in Liberia and Chile. Both women know a lot about countries in conflict situations.
	Before I turn specifically to address the points raised in the debate and, in particular, to our own domestic agenda, I should like to answer the question asked by my noble friend Lady Gould about UNIFEM. The UN Secretary-General has appointed a high-level panel to consider how to improve the coherence, effectiveness and efficiency of UN operations at country level. We all know how important it is to improve the effectiveness and efficiency of the UN. There are too many agencies with overlapping mandates that compete against each other, which leads to duplication, fragmentation and reduced impact where it matters. We all know that a fragmented UN is a weak UN. Radical changes will be needed to achieve better performance from the UN, and the Government are determined that the UN's ability and authority in advocating and promoting the empowerment of women should be strengthened through these reforms. I am particularly conscious that, in taking forward issues of women's equality, we cannot just look at integrating issues; that is not enough, although it is an important goal. We need to take specific action. That is as important at an institutional level in global organisations as it is in national ones.
	My noble friend Lord Giddens pointed to the deep cultural issues that we need to tackle as a society and spoke very powerfully about the pressure that we put on girls and women to conform to a particular image, and to be something that sometimes they do not want to be. We need to get to grips with the implications of what are often personal and hidden responses by women to the important issues of identity and culture. I thought it was very brave of my noble friend Lady Massey to point in this House to women's particular qualities, identifying what we bring or can bring to the table. The reason that I thought my noble friend's speech was brave is because culturally we sometimes feel embarrassed about talking about the specific contribution or qualities that women bring in all walks of life.
	We need to recognise women's bravery, vision and tenacity, because that is part of the way that we can challenge some of the stereotypes that still exist about the contribution that women make to our world. I also recognise that there are different forms and ways in which women talk about their experiences. What my noble friends Lord Giddens and Lady Massey have done is to demonstrate how important it is to help women and girls through what are difficult times.
	Women's economic participation is crucial to women's empowerment. We have made huge progress here in the United Kingdom. There are more women than ever going out to work. Female employment rose from 42 per cent to 70 per cent from 1971 to 2004. There is good news for older women workers too. The rate of participation for women over 55 has increased a full percentage point to almost 32 per cent, but we still have persistent problems with the pay gap and the need to tackle occupational segregation.
	I pay tribute to the work of my noble friend Lady Prosser and the Women and Work Commission for their report, and for the ideas in it on how to close the pay and opportunities gap.
	Removing barriers to women working in occupations that are traditionally done by men and increasing women's participation in the labour market would be worth between £15 billion and £23 billion. Improving women's economic participation also includes support to women in developing their own businesses. In 2003 the Government published a strategic framework for women's enterprise, with the key target of raising the proportion of businesses that are majority-owned by women from 15 per cent in 2002 to nearer 20 per cent by 2006. I hope that those who have participated in the debate today will ensure that the Government work to achieve that target, because we need to create an environment and a culture that encourage more women to start and grow their own businesses.
	We must acknowledge the importance of what we have done in getting the balance right between work and leisure, but also between work and family life. We are continuing to improve women's rights by increasing maternity and adoption pay. We are extending the right that we gave parents to ask to work flexibly in view of their caring responsibilities. My noble friend Lady Gould mentioned the measures introduced by the Work and Families Bill, which aim to help give children the best start in life, to enable all families to have genuine choices about how they balance their work and family-caring responsibilities, and to help business recruit and retain the best people.
	Let me now turn to an issue that has been a persistent cause of concern, namely violence against women, which was talked about by my noble friend Lady Gale. None of us fails to be shocked by the statistics. Domestic violence accounts for 17 per cent of all violent crime. Globally, domestic violence is the leading cause of morbidity among women aged 15 to 44, which is greater than war, malaria, cancer and motor vehicle accidents. Every time I read that sentence, I find it deeply shocking.
	Here in the United Kingdom we have come a long way. It was only in 1971 that Refuge opened the first safe house for women and children experiencing domestic violence. Within the Government we are working hard to change attitudes towards and the culture of violence against women. I assure my noble friend Lady Gale that we see the work that we are doing as part of developing a national, strategic, cross-government approach to this issue. This month we will publish the updated Domestic Violence National Delivery Plan, to help improve the rate of reporting of domestic violence. As a direct result of that plan we are working to set up specialist domestic violence courts. A rape campaign—as mentioned by my noble friend—was launched earlier this week, to address young men's behaviour, and we are working with the Corporate Alliance against Domestic Violence, which is a group of companies acting together to support their employees.
	Like my noble friend Lady Gale, I pay tribute to the work of Black and Asian Women Stand Out, an organisation that I know well.
	We are also planning to publish a consultation paper in the next month, proposing a number of measures to strengthen the legal framework on sexual offences and to do more to reduce the inhibitions to effective prosecutions.
	A number of those who spoke in the debate talked about the importance of looking at the pension issue, such as my noble friend Lady Gould. I would particularly recognise the contribution of my noble friend Lady Hollis, who has worked tirelessly on this issue. I do not think that she saw me, but she and a group of very determined women were in one of the Dining Rooms recently lobbying my right honourable friend the Secretary of State for Work and Pensions over dinner. I was absolutely delighted that it was him and not me on the receiving end of their lobbying.
	The noble Baroness, Lady Morris, used some of her personal story and her mother's story to point to the difficult decisions that we need to take in relation to this issue. It is also an issue mentioned by my noble friends Lady Lockwood and Lady Dean. Many of the poorest and most vulnerable pensioners are women. We want all pensioners to have a decent and secure income in retirement and to share fairly in the rising prosperity of the country. My noble friend Lady Hollis eloquently described the difficulties that women face, particularly the earnings hit that they take because of part-time work and the pension hit because of the risk surrounding their lives, including their caring responsibilities.
	We have made some progress in achieving fairer pension outcomes for women. For example, over 1 million women pensioners have been lifted above low income levels by the introduction of the pension credit. Measures are in place to help carers secure a better income in retirement. However, there is a great deal more work to do. We have to seek to build a consensus on the way forward and on achieving a fair outcome for women. I have heard the strong views expressed across the House on the issue today.
	My noble friend Lady Lockwood mentioned the importance of education. Girls are outperforming boys by 8 per cent at GCSE grades A to C and by 2 per cent at A-level grades A to E. Indeed, more women than men are gaining degrees, but we still need to do much more to encourage girls and young women to not only develop their IT skills but go into areas like science and engineering.
	The noble Baroness, Lady Greengross, spoke of the need to look at the whole area of women's health, their access to healthcare and the support available to them, which is a very serious issue indeed.
	I now turn to the issue of women in political and public life. It is very clear from the speeches of my noble friends Lady Gould and Lady Dean and of the noble Baronesses, Lady Northover and Lady Morris, that all our parties face these difficulties. All who have spoken about political and public life have been active at the forefront in trying to transform not only our political parties, but public life in general.
	Women now make up 18.4 per cent of our own House; the number of women MPs continues to increase, and much of that change has come about because of the legislation that the Government introduced to allow political parties to use positive measures towards women's increased participation. It is important to say that legislation is necessary, not because women cannot succeed on the basis of merit, but because discrimination means that too often women are not given the opportunity to try. I am pleased that my party has led the way, but my noble friends have highlighted the challenges that continue to face us. Perhaps this is one of those issues on which there can be greater co-operation across parties. For the first time in the debate I want to make a political point: I am happy for the Conservatives and the Liberal Democrats to increase the number of women MPs as long as that is not at the expense of the total number of Labour MPs.
	The Government have set very clear targets on women in public life. The proportion of women in public appointments has risen from 32 per cent in 1997 to 35 per cent now. Only 6.2 per cent, however, of those appointments are held by ethnic minority women, so there is a great deal more to do.
	My noble friend Lady Billingham spoke about the important issue of women in sport. She is quite right about the difficulties that women face. We need to recognise the complicated relationship that exists as regards some of the issues raised by my noble friend Lord Giddens for girls' and women's relationship with sport as participants and as observers. Like my noble friends Lady Billingham and Lady Massey and the noble Baroness, Lady Morris, I am a great sports enthusiast, but the figures make pretty depressing reading. Women are ignored in three-quarters of the decision-making positions in sport. They make up only 26 per cent of the membership on sports boards and committees. The most depressing thing I have read in relation to sport is that the Football Association's women's committee, which oversees the development of the women's side of the game, has just two women members out of a total board of 10. If that does not point out the difficulties that we face in this arena, I do not know what does.
	We need more women, regardless of age, ethnic background, social circumstances or ability, to enjoy and benefit from participating in sport. We need to improve opportunities for women and girls to participate, lead, coach and officiate in sport. We are working with our key partners on a range of measures to encourage increased participation. We have to build on the successes of the women who are role models. Kelly Holmes was mentioned and we also have Paula Radcliffe and, of course, England's women's cricket team took part in last year's Ashes. The games of 2012 will be a huge opportunity and we need to do a great deal of work in the run-up to 2012.
	I have run slightly over my time. I want to conclude with a story that sums up how far we have to go. This morning, at Victoria station, a hotel group was promoting weekends away and giving away goodie bags, but only to women. What did those bags contain? They contained packets of Surf and Persil, the implication being that even in 2006 women do the domestic chores. Cultural change is at the heart of what we need to do.
	This has been an excellent debate. I celebrate the progress that has been made, but I think it important to pause and reflect on the work that remains to be done, the disparities and inequalities that need to be addressed and the arguments that remain to be won. The values that inspire International Women's Day—respect for the dignity of all women and international solidarity—are as relevant to all of us today as they were to all those pioneering women years ago. Let us not only continue to celebrate International Women's Day and talk about women's issues in this annual debate, but ensure that women's issues and equality issues are at the heart of the agenda when we talk about policy issues across government.

Baroness Gould of Potternewton: My Lords, I thank everyone who has participated in what has now become an annual debate in relation to International Women's Day. The debate has been excellent. Sometimes our male colleagues come to listen to the debate and afterwards they say to me, "That was very good", but I wish that they would take part. I say to my noble friend Lord Giddens that he was a wonderful "odd man out". I also express my appreciation to my noble friend Lady Hollis. I am so pleased that she feels fit enough to be able to participate in the debate. Her contribution was so important. I also thank my noble friend the Lord President for her very supportive and invigorating response to the many diverse issues that have been raised. She was so right to remind us that we are part of a global sisterhood. We have to concentrate not just on our own problems and on things that we need, but on those of our sisters throughout the world. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Pensions: Occupational

Lord Hunt of Kings Heath: My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend in another place. The Statement was as follows.
	"Mr Speaker, with permission, I should like to make a Statement on the ombudsman's report on the security of final salary occupational pension schemes published yesterday. The Parliamentary Commissioner's report is a detailed piece of work and deserves a proper, full and formal response. It is my intention to publish such a response in the next few weeks.
	"However, I would like today to set out the reasons why, after very careful consideration, we have reached the view that we cannot accept any of the findings of maladministration and why we have therefore decided to reject all but one of the recommendations.
	"The ombudsman's report concludes that over the period between 1996 and 2002, the Government were guilty of maladministration in three principal areas. I would like to take each of these findings in turn. And I make no apology for the detailed response that I am about to give. To offer anything less comprehensive would not properly reflect the importance of the report and the seriousness with which we treat the findings that the ombudsman has made against this Government and the last. I should stress, in that context, that my department has co-operated fully with the ombudsman and her office during the preparation of the report. It has provided detailed information and documentation on request. And it has commented extensively on the specific findings which the ombudsman had indicated that she intended to make. Those responses are set out in the report, included in a lengthy annexe to the report.
	"Turning, then to the individual findings: first, the ombudsman found that official information about the security that members of final salary occupational pensions schemes could expect from the minimum funding requirement (MFR), introduced in the Pensions Act 1995, was sometimes inaccurate, incomplete, inconsistent and, therefore, potentially misleading and that this constituted maladministration.
	"We do not accept that the department's leaflets were inaccurate, incomplete, inconsistent or misleading. It is true that some were more detailed than others. This was because they were designed for different audiences. All the leaflets covered by the report carried very specific statements that they were not a full explanation of the law and were for general guidance only. The leaflets themselves make this clear.
	"Perhaps I could illustrate those points by taking some of the key documents referred to in the report in order. In 1996 the then government published a guide to the Pensions Act 1995—leaflet PEC3—which described the intention of the various measures in the Act, including the minimum funding requirement or "MFR" and how they were expected to operate. The leaflet also said that,
	'This leaflet is a brief summary of the changes. If you need advice about your occupational pension, speak to the trustees or managers of the scheme . . . This leaflet gives general guidance only and should not be treated as a complete and authoritative statement of the law'.
	"That, Mr Speaker, was very much the pattern. In July 1997 the Occupational Pensions Regulatory Authority guide for pension scheme trustees summarised what the MFR was. The guide also said, 'You'—that is, the trustees—
	'will need to take advice from professional advisers so that you can use your powers and fulfil your duties properly. Please note that this guide should not be taken as a definitive statement of the law'.
	"In May 2002 the department issued leaflet PM3—Occupational pensions—your guide. While the guide did not discuss the risk of schemes winding up underfunded, it did say:
	'this guide . . . looks at some of the questions you may need to think about and it tells you where you can find more information . . . Read any pension information your employer gives you . . . This leaflet is for guidance only. It is not a complete statement of the law'.
	The Government do not consider that any of the leaflets or quoted statements relied on by the ombudsman could have formed a proper basis for scheme members, still less trustees who were professionally advised, to assess the security of their individual pension schemes.
	"But, even more important, the Government also believe that the report fails to demonstrate that decisions taken by individual scheme members were influenced by the information the Government did, or did not, make available. In other words, the report simply does not establish that the wording of leaflets led to the losses suffered by individuals.
	"I turn now to the second finding of maladministration. The ombudsman says that the failure by my department to review its existing information leaflets—when informed that scheme members and member trustees did not know the risks to their accrued pension rights—constituted maladministration. The Government do not believe that the information given to the department by the actuarial profession during this time should have instigated a review of its publications. Those recommendations concerned how trustees—not the Government—should communicate with their members about the funding of their schemes.
	"The department invited views on that issue in the consultation document it issued in September 2000 on the future of the minimum funding requirement— MFR. The response to that consultation led ultimately to proposals, since implemented, for replacement of the MFR. I shall say more about that replacement later. But so far as we are aware no respondents suggested that departmental publications were causing confusion. They were not advising that the content of these leaflets concerning the purpose or intent of the MFR was misleading or inaccurate. Ministers cannot fairly be criticised for failing to do something that was simply not proposed.
	"Moreover, trustees had access to advice from their own scheme actuary, who would have been well aware of the operation of the MFR. In addition each MFR certificate included a statement that meeting the MFR did not equate to full buy-out. All of the information was available to scheme members. We do not believe that it would have been reasonable for trustees to have relied on publications issued by the DWP which were brief and general in nature, rather than the professional advice they had access to and were under an obligation to consult.
	"Trustees were required to give all scheme members basic information about their scheme, and many trustees produced fairly detailed information booklets. We have seen no evidence from the report that the ombudsman has considered what information trustees supplied to their scheme members and what, if any, the impact of this information might have had.
	"Thirdly, the ombudsman has said that the decision in 2002 by DWP to approve a change to the basis of the MFR was taken with maladministration. The Government believe that we acted wholly responsibly in implementing the recommendation of the actuarial profession which had received the backing of the independent Government Actuary's Department. The ombudsman has not allowed us to see the full actuarial advice on which some of her comments were based. The government actuaries advised the ombudsman that if this advice was not disclosed then it made it impossible for anyone to understand the basis on which she reached her conclusion that the Government were guilty of maladministration. As a result, we have not been able to see or challenge how she arrived at some of her conclusions on the 2002 change.
	"The change in 2002 was intended to bring the MFR back to its original strength. Adjustments to the MFR were always on the principle of maintaining its 1997 level. This was the principle upon which the actuarial profession kept the basis of the MFR under review and made recommendations to the department. It was also the basis upon which the Government Actuary's Department advised my department. The report contains a letter from the Government Actuary, referring to the decision criticised by the ombudsman. I want to quote from it:
	'the evidence base [for the DWP's decision] was not insufficient since it was based on strong advice from the actuarial profession, which had been developed by a committee containing leading technical experts from most of the major firms of actuaries, and supplemented by GAD as a further independent source of advice. The evidence base for this decision was in fact extremely strong and much stronger than for many (perhaps most) of the decisions that have to be taken by Government'.
	The ombudsman acknowledges in her report that the 2002 change did not affect the degree of knowledge which scheme members had.
	"Against this background, the Government have considered carefully the ombudsman's first four recommendations—which involve considering whether to restore the lost pension rights of affected scheme members, making consolatory payments and apologising to scheme trustees. As I have already made clear, the Government are unable to accept the findings on which those recommendations are based. We do not believe the findings of maladministration can be supported by the facts. It simply cannot be right that the losses from the schemes that have collapsed should be met by the taxpayer without establishing any causal connection between the actions criticised in the ombudsman's report and the losses people have incurred.
	"The report fails to establish this connection. Indeed, in respect of the ombudsman's fourth recommendation—relating to schemes which began to wind up between April 2004 and April 2005—the report itself acknowledges that the individuals concerned could be said to have had the opportunity to take whatever action they could to mitigate their potential loss. I do not consider that it would be in the wider public interest for government to accept this very substantial liability on behalf of taxpayers. We calculate this liability as being in the range of £13 billion to £17 billion in cash terms over the next 60 years. We estimate that the administration costs would be in the region of a further £20 million each year.
	"We do not therefore intend to take the actions recommended by the ombudsman. The taxpayer cannot be asked to accept the responsibility for effectively underwriting the value of private investments in the way the report suggests. The Government do, however, accept the ombudsman's fifth recommendation with regard to reviewing the time it takes to wind up a defined benefit pension scheme. Work is already under way in this area. We will set out our proposals for how we intend to proceed when this work is completed.
	"I would like to finish by making two things absolutely clear. First, this Government have been the first to accept the moral and social obligation to make sure that as many as possible of those who have suffered hardship and distress in these circumstances receive financial support. That is why the Government have set up the financial assistance scheme, with £400 million of public money. The scheme is designed to provide help to those who have lost the most and who are in the greatest need—those closest to retirement and who are therefore least able to make alternative provision. The scheme will currently help up to 15,000 people who have faced significant occupational pension losses. It will top up their pensions with financial support, to give a maximum income of up to £12,000 a year.
	"The Government are prepared to look again at all aspects of the scheme as part of the current spending review. And my right honourable friend the Prime Minister yesterday made it clear that we,
	'will expedite that and do that as quickly as we possibly can'.
	Secondly, this Government have led the way in providing greater levels of security for the future. We have replaced the MFR, which is of course a large part of the subject of this report, with new scheme funding arrangements which are more flexible and fit for purpose. And the pension protection fund and the new proactive pensions regulator will transform security for members of defined benefit schemes.
	"We do not underestimate the importance of these issues for those people who have been affected by pension scheme closures, particularly when employers are insolvent and cannot make up any deficiency in scheme funding. We will continue to do what we can to help them. That is the fair and sensible way for us to proceed. I commend this Statement to the House".
	My Lords, that concludes the Statement.

Lord Skelmersdale: My Lords, the House will be grateful to the Minister for repeating the Statement made in another place a few minutes ago, but that, I am afraid, is as far as our gratitude goes. The Statement contains no hint of apology to the thousands of people who have lost out because of the actions of government. Yes, I refer to government in general, because there is also muted criticism of the previous Conservative government, to which the Minister referred in his Statement. But the fact of the matter is that the main criticisms are of things that this Government have done on their watch.
	There is no doubt that yesterday the Parliamentary Ombudsman published a devastating report. It was entitled Trusting in the Pensions Promise but, when I scanned it last night, I discovered that it was about anything but. It might be more properly entitled Mistrusting the Government's Pensions Promise. The Parliamentary Ombudsman found:
	"The maladministration my investigation has uncovered caused injustice to a large number of people who, as a result, lost the opportunity to make informed choices about their future",
	because official leaflets encouraging people to join a final salary company pension were,
	"sometimes inaccurate, often incomplete, largely inconsistent and therefore potentially misleading".
	The Government's response to that, shown by the Statement, is that they were not—and they have given selective quotes to show that they were not. I welcome the fact that the Government are going to publish a proper written response to the ombudsman's report but, when they publish it, I request that they publish an annexe of the pensions leaflets in full, so that we can see whether the Government are right or whether the ombudsman is right.
	The facts of the matter are these. My right honourable friend Peter Lilley realised that occupational pension schemes were vulnerable to the vagaries of the financial markets and introduced the minimum funding requirement for such schemes in the dying days of the previous Conservative government. The incoming Government naturally took advice and, following that advice, decided that the MFR—as it has become known by acronym—was too strict, and relaxed it. The ombudsman found no fault with that decision. However, she castigates the Government for a further relaxation, in March 2002, against the advice of the actuarial profession in both November 1999 and May 2000. On the first occasion, the actuarial profession warned that the MFR was too low to protect members and, on the second, that scheme members had no idea of the risk to their pensions; yet still the MFR was relaxed.
	I have long believed that governments are elected and ultimately lose elections, on the basis not of facts but of perceptions. The Government are suffering a bad week as far as electors' perceptions go. A tranche of their own Back-Benchers do not like what they perceive will follow from the Education and Inspections Bill; your Lordships do not like what you perceive the last Labour manifesto said about the relationship—the compulsive relationship, I might add—between ID cards and passports; and the ombudsman decries the perception in DWP leaflets that occupational pension schemes are a safe foundation for pensioners' incomes.
	I shall go back to my history. At the same time, the DWP was still issuing leaflets extolling the virtues of opting out of SERPS—latterly the state second pension—and into an occupational scheme, without highlighting the potential risks to members' future pensions, whereas there is no risk to second state pensions although the payout would be much lower. The Government are shortly to publish their White Paper on the Turner report. One of the features of that report is a government-run pension scheme, of which the Government have signalled their approval. Why should any employee opt in to such a scheme after the revelations in this report?
	The ombudsman also lays into the Chancellor for abolishing advance corporation tax, a matter that the noble Lord, Lord Oakeshott, and I have consistently raised with the Minister. The round figure we have given is £5 billion a year taken out of pension schemes' income. The Minister has said that it is nothing like this, and referred us to the work of the Pensions Policy Institute. Indeed, it was only last week that the Minister repeated that suggestion. The noble Lord, Lord Oakeshott, can speak for himself, but I have studied it in depth and discovered that the total figure is not £5 billion, but £5.7 billion. Not all this is attributable to the sorry state of pensions schemes. However, the PPI believes that that figure is anything between £2.5 billion and £3.5 billion a year, even at its lowest. This is a significant figure and there is no doubt that government intervention has had a serious effect not only on the finances of pension schemes, but on the Stock Exchange as well. It is money on which future pensioners should be able to rely, and much less than the £15 billion that the Government claim it would cost to correct what can only be described as government mis-selling. My honourable friend Mr Hammond calls this helping to precipitate the underfunding of pension schemes.
	It is, of course, true that the Government have appreciated that pensions schemes should never again get into the mess that has been going on since the mid-1990s. They introduced a pensions insurance scheme, the Pension Protection Fund, in the 2005 Act. This is now up and running, and 40 schemes are being administered by the fund. However, during discussion of the then Bill in another place, Labour Back-Benchers threatened a revolt because between 85,000 and 120,000 pensioners would never be covered by the PPF as their employers had already ceased trading. The Government's reaction was to cobble together a small compensation fund—the Financial Assistance Scheme—which would cover only those schemes which commenced winding up between January 1997 and April 2005, if my memory serves me right. It is not only small but mean, at £20 million a year, which still does not cover the people covered by the ombudsman's report. Only 27,000 out of the 85,000 people who have lost out because of the Government's actions are in receipt of money from the FAS. I welcome the Government's decision to look again at the FAS. There must be a way of finding extra funding for it—the use of unclaimed assets, for example, which has been a suggestion of my party for some time.
	Finally, the whole tenor of the Government's response is totally to ignore the ombudsman's findings. What is the point of having an ombudsman if all that the Government do is to ignore her findings—not once but twice during the current year?

Lord Oakeshott of Seagrove Bay: My Lords, the Government should be ashamed of their response to this ombudsman's report. Whatever the substance of the findings, they should not be relying on what I can only call a Milosevic or, if you prefer it, a Saddam Hussein, defence—that whatever the court says, it has no jurisdiction over them. Should the Minister not accept that if the ombudsman makes very serious charges of this nature, in a very thorough, well argued and well researched report such as this, they should be taken seriously and not be swatted away like an irritating fly, which is what the Government have done? Frankly, I am appalled.
	My first reaction when I heard the Secretary of State yesterday morning was amazement that it has taken Mr Hutton so long to reach the Cabinet. He is a graduate with a starred double first in the academy of evasive new Labour lawyer-speak. We heard the reinterpretation of "voluntary" last night, in a way that did not impress your Lordships, but Mr Hutton saying that the Government were willing to have another look at the Financial Assistance Scheme as part of the current spending round really took the biscuit. If there is a review of the current spending round and there is some increase in funding from the Treasury, when will the first penny from that reach the poor people who are waiting for redress from the Financial Assistance Scheme? How many of the 85,000 people robbed of their pensions have now received payments from the scheme, and what is the total of payments made?
	This scheme is an outrage. Twenty million pounds a year is grossly inadequate; it is not going too far to say that that is just the price of a few peerages from this sleazy Government. We have made it clear from these Benches—I did not hear it from the noble Lord, Lord Skelmersdale, but I would be interested to hear what the Official Opposition say—that we believe that the people who have lost their pensions under the Financial Assistance Scheme should be compensated at least up to the levels provided by the Pension Protection Fund. In contrast to the hysterical figures quoted by the Prime Minister yesterday, we have made it clear that we believe it would cost in the order of £100 million a year, which we believe to be fully affordable—and affordable from the contingency reserve—given the £4 billion spent on Iraq.
	Today, I ask the Minister to justify the ridiculous figures of £15 billion to £17 billion that are being quoted, and to clarify what the figure would be on an annual basis. Why do the Government believe it necessary to insist on full annuity buy-out at very poor rates under the Financial Assistance Scheme? If the assets were pooled, we believe that £100 million a year would be sufficient to give a substantial increase in the benefits payable, and to ensure that all 85,000 people receive some benefit, rather than have a ridiculous cut-off period whereby only people within three years of retirement receive those benefits.
	I also pay tribute to Ros Altman, the pensions advocate, as she was called in the ombudsman's report. She has done a wonderful job in exposing this scandal. She single-handedly brought this to Ministers' attention. Again, it is a scandal that her very carefully argued and well researched work has been swatted away like this. Ultimately it is an issue of how this country works and how our democracy works if a report of this kind can be ignored, laughed at and almost vilified, although "vilified" is perhaps too strong a word. The fact is that a very carefully argued and researched report has just been ignored. That is unacceptable in our democracy.

Lord Hunt of Kings Heath: My Lords, first of all I thank the noble Lords for their comments, although I searched in vain for something I could agree with, save that we all start from the point of view of sympathising with any person affected by the collapse of pension schemes. Anyone who has met some of the people involved will know just how hard it is for them. One must have every sympathy with them. I say to the noble Lords, Lord Oakeshott and Lord Skelmersdale, that it follows from that that our decision was not taken lightly. Indeed, my understanding is that it is the first time that such a decision has been made by my department and its predecessors.
	At the end of the day we do not accept the findings of the ombudsman. We see no causal connection between the actions criticised in the ombudsman's report and the losses people accumulated. Even the ombudsman's comments in her report—when referring to the 2002 change, mentioned by the noble Lord, Lord Skelmersdale—say that this did not affect the degree of knowledge of scheme members, and the knowledge of scheme members is the basis for our decision. Indeed, in relation to the schemes that began winding up in 2004–05, the report says that the individuals concerned could be said to have had the opportunity to take out whatever provision to mitigate the situation. This decision has not been taken lightly, but we simply do not accept the recommendations or logic of the report.
	The noble Lord, Lord Skelmersdale, has raised a number of issues around pension policy in general, including our great friend the dividend tax credit. He and I have debated the question of how much that has come to. I think this is the first time that I have seen acknowledgement from the opposition Front Bench—I did not see it in the other place—that the £5 billion alleged is inaccurate. The point is that that action was also accompanied by some tax cuts. The impact of such factors as the fall in the stock market, the effect of longevity on actuarial assessment, and the pension holidays that the noble Lord's government allowed for in legislation all dwarf the impact of the decision taken around the dividend tax credit.
	The noble Lord, Lord Skelmersdale, has welcomed the fact that we will publish a full response to the report in due course and has asked whether that will include information about the leaflets referred to. I have a list of some of the leaflets with me; I will certainly see whether I can make as many as possible available to the noble Lord, possibly in advance of publication of our full response.
	As far as the March 2002 decision is taken, I ought to say—as was said in the Statement—that the ombudsman has not allowed us to see the full actuarial advice on which some of her comments were based. The decision we took was on the basis of actuarial advice endorsed by the Government Actuary's Department. Indeed, the change in 2002 did not weaken the basis of the MFR as the ombudsman described. Adjustments to the MFR were made on the principle of maintaining its 1997 level. The noble Lord, Lord Skelmersdale, then referred to the whole question of the Pensions Commission debate and the public's confidence in the outcome. The process of establishing the Pensions Commission, the debate that has taken place, and the reaction to the report show a great deal of interest in these important areas from many people. We are holding a number of pension day events all over the country on Saturday. I am convinced that we are in a position to move forward—with, I hope, consensus—and provide far greater stability in the future in relation to pension policy in general.
	I thought the tone of the remarks made by the noble Lord, Lord Oakeshott, was rather unfortunate. We start with enormous sympathy for the people who have been involved in the scheme failures. There is no question about that. We have had to make this decision based on our view of the facts and the fact that no causal relationship was accepted. As far as the FAS scheme is concerned, the position is that 27 members in five schemes have so far received payment. I shall be quite frank: we find that disappointing. Part of the Government's response to the ombudsman's report is to look at the question of the speed of wind-up, which is one of the factors clearly related to this. We are sympathetic to any suggestions that may come forward in that regard. My right honourable friend the Prime Minister made it clear that we will be reviewing the FAS and that we will do so expeditiously. I hope that at least will bring some comfort to the noble Lord.

Lord Higgins: My Lords, is this report not a damning indictment of the Chancellor of the Exchequer and the series of subservient Secretaries of State who, over the past 10 years, have wrecked an occupational pension scheme in this country, which was, perhaps, the best in the world? The report must be put in a broader context, because a number of Government actions have resulted in this tragic situation, not least the change in ACT, to which the Minister has referred. Can he tell us what the Government's estimate is of the amount that has been taken by pension funds as a result of the ACT change and how that relates to the estimate they are now making for compensation? If the figures are related to each other, it is a matter of relating a payment of something that has come from pension funds to something that effectively goes to pension funds.
	At all events, it is desperately disappointing that the Government are not even prepared to apologise, as the ombudsman's recommendation states, when in fact, given their responsibility for the present situation, they really ought to resign.

Lord Hunt of Kings Heath: My Lords, I have already expressed the sympathy that the Government and I feel for the members who have been affected. But the fact is that we do not accept the conclusions of the ombudsman's report. In that sense, I do not think it follows that an apology is required. However, I do express a great sympathy.
	The noble Lord asked about advance corporation tax. The noble Lord, Lord Skelmersdale, suggested that the Pensions Policy Institute projected figures of, I think, between £2.5 billion and £3 billion. I do not have firmer figures than those. I would say, however, that you cannot isolate that particular action and say that it somehow caused the failure of so many pension schemes. Very many factors caused it, including some of the decisions that the noble Lord's government took and the prevailing situation in the markets and in the revised actuarial assumptions on longevity. It is very unfair to single out one action and say that it was the cause of the whole pension situation. I think that we would have a fairer and more balanced debate if there were more recognition that a whole number of factors led to the position.

Baroness Hollis of Heigham: My Lords, it gives me no pleasure to say, particularly as I, too, much respect the work of Ros Altman, that I think that the Government's response is the right one. I do not know whether anyone else here was in the House when we were handling the Pensions Act 1995. I led for the Labour opposition. All of us taking part in that debate, led by the Minister, the late Lord Mackay of Ardbrecknish, were entirely clear what the MFR represented—the 50:50 risk. It was precisely because the MFR was not a guarantee of full funding in all circumstances that I with my noble friends moved an amendment for a central discontinuance fund which the government, in their folly, rejected. It would have introduced the equivalent of the PPF and avoided the subsequent misery. We moved the amendment precisely because we and all participants in the debate and all of the professional advisers including the actuarial and accounting professions knew what the MFR represented and as a result the consequences for trustees. That is why I think the Government were right. All the subsequent adjustments to MFR were to bring it into line with the original intent of that legislation.
	I want to go one step further and ask: what would it mean if the Government accepted responsibility for what has happened? It would mean two things. First, low-paid people, often women, who are in no pension scheme whatever would be expected to cross-subsidise through their taxes those who have pension schemes. Secondly, it would mean, as regards moral hazard, that noble Lords opposite are suggesting that employers and employees at the time thought that the Government would rescue any pension scheme come what may. What sort of moral hazard does that represent? What does that say—that the Government are going to underwrite, and were expected to underwrite at the time, any scheme regardless of the level of employer funding? Surely that would be absurd.
	So although I, like all others, very much regret what has happened to pension schemes, I think my noble friend is entirely right to say that it is due to trends beyond our control and that we are right to revisit FAS. However, the Government should not take responsibility for that over which they did not have control.

Lord Hunt of Kings Heath: My Lords, surely my noble friend is right. It cannot be right that losses from the schemes which have collapsed should be met by the taxpayer without establishing a causal connection between the actions criticised in the ombudsman's report and the losses people have incurred. I have yet to hear any noble Lord try to attempt to make that causal connection. I do not believe that you can make that causal connection. My noble friend is right concerning the much loved and much missed Lord Mackay. However, I would refer noble Lords to page 53 of the ombudsman's report which deals in considerable detail with the statement made by Lord Mackay on the very issue she raises. It is very clear there.

Lord Fowler: My Lords, the noble Baroness was a pensions Minister between 1997 and 2005, so we are not entirely surprised by her response. It is all very well for the Government to say that they do not believe that they have done wrong, but surely the Parliamentary Commissioner was set up to give independent judgment on whether governments did wrong. Surely that was the whole point of the Parliamentary Commissioner. Is it not a fact that the Parliamentary Commissioner made not one but three findings of maladministration against the department? In those circumstances, many people will feel it is the Government's duty to put right the injustice that has been caused.
	On a practical point, and I take up the point of the noble Lord, Lord Oakeshott, surely it can be put right not by one capital payment but year by year as pension payments fall due on a pay-as-you-go basis. I remind the noble Lord that that is what we eventually did in the British Rail case. There was a hole in that pension fund. A Conservative government and a Labour government combined to put that right and that is exactly what should be done in this case.

Lord Hunt of Kings Heath: My Lords, I have already made it clear that, as my right honourable friend the Prime Minister said yesterday, there will be a review of the Financial Assistance Scheme. We will try to do that as quickly as we possibly can. Obviously we will take into consideration the point that noble Lords have raised here today and honourable friends have raised in another place. I accept that not to accept the ombudsman's recommendation is not a matter that any government could take lightly. It is not taken lightly. Ultimately, however, and at the risk of repeating myself, we do not accept the arguments and recommendations that she has made. We do not believe that any causal relationship has been established between the matters she investigated and the actual losses suffered. On that basis, it would be highly irresponsible for a government to come here and say we will do what the ombudsman requires. I very much doubt whether the party opposite, were it in government, would do anything different from what I am doing today.

Lord Crickhowell: My Lords, this is the most damning report of government action that I have read apart from the Auditor-General's recent report on the Home Office finances. The ombudsman, perfectly reasonably, refers to the Prime Minister's foreword to the ministerial code and his belief that,
	"citizens should be entitled to expect that the publications of official bodies—which create, oversee, administer and enforce the legal frameworks which they are told are there to protect their interests—do not mislead them".
	The Minister responded in great detail, point by point, trying to make out that no causal connection had been established. The interesting thing about his point-by-point response is that it had been made previously by Permanent Secretaries and other officials to the ombudsman in advance of the publication. The ombudsman, having considered those responses, continued to take the view that she did—that there had been maladministration and that it did cause the damage that she identified. I take one specific example, the point about health warnings. She said:
	"I do not think that such a 'health warning' can excuse the omission of perhaps the most significant factor in any reasonable answer to that question—that a pension was only as secure as the employer standing behind it".
	So the ombudsman has considered the matter point by point, and has still submitted the report which the Government so casually regard.

Lord Hunt of Kings Heath: My Lords, the Government have a responsibility to take their decisions in what they believe to be the public interest. We have had an opportunity to respond to the ombudsman's report, and we do not believe that the case has been proven. That said, it would be wholly irresponsible of me to say to the House today that we will be prepared to implement those recommendations and commit that amount of public money. Let me repeat: we do not accept that the department's leaflets were inaccurate, incomplete, inconsistent or misleading. Some of them were very general, but they were designed for very different audiences. They all gave specific statements. They were not a full explanation of the law, but were for general guidance only. I do not believe that the Government can be criticised for that. I should point out that some of the documentation we are talking about was produced by the party opposite when it was in government.

Lord Howarth of Newport: My Lords, I thank my noble friend and the Secretary of State for injecting a very badly needed and overdue dose of realism into the public discussion on occupational pensions. It does not belittle the very real anxieties and difficulties experienced by members of pension funds that have been found to be in deficit to say that no one who thought seriously and responsibly about occupational pensions could ever suppose that the Government would underwrite whatever pension promises the private sector might make. If that were the case, why would the private sector ever bother to offer pensions? It is clearly a fatuous proposition.
	Is it not one of the unfortunate effects of the ombudsman's report that it will tend to exacerbate the climate of unrealism? Do we not suffer from excessive expectations on the part of people who somehow suppose that they will not need to save significantly more or work significantly longer to enjoy very prosperous standards of living in a lengthening old age? Equally, do we not suffer from exaggerated fears? Would it not be helpful if the regulators could also become more realistic? FRS17, by exposing hypothetical pension deficits in the future, seems to me to be causing catastrophic effects. It is driving businesses to put vast sums of money into what is in essence a bucket with a hole in it. The more they buy gilts, the more the yield on gilts falls and the more their prospective hypothetical deficits increase. The likely catastrophic consequences of this are that we will fail to invest in the future of our businesses and in the productivity and the competitiveness that we need if we are to generate jobs, to enjoy prosperity and to be able to pay out pensions. Would the Minister agree that a lot more realism is needed?

Lord Hunt of Kings Heath: My Lords, I certainly agree with the general thrust of my noble friend's argument that realism, stability and a cooling of some of the hysteria that one has heard on general pension matters would be very important.
	On bonds, my noble friend may like to know that the Economic Secretary to the Treasury recently met gilt market participants, as part of the Treasury's regular preparation of the DMO remit for next year, to canvas their views on the shape of next year's remit, including gilt-issue plans for next year. He might like to know that these matters are being discussed. The general point is this; in the actions that the Government have taken, it has been very important to try to ensure as much as possible that current schemes are viable and that what has happened to so many thousands of unfortunate people will not happen again. That is why we have appointed the pension regulator, why the legislation has been passed, and why we have the pension protection fund.
	As regards the future, I believe that following the Turner commission is the way forward. The work around the commission and the public debate have created much greater public understanding of some of the critical issues that we face. One must remember that the Pension Commissioner's assessment is that the pension crisis is not one of today. The issues that he and his fellow commissioners tackle are for the medium and the long term. I believe that we will regain confidence if we can achieve a consensus on a way forward that will give the people of this country a sense that pensions policy will remain stable, not only in the short term but over 10, 20 or 30 years. Confidence is clearly very important for the future.

Lord Northbrook: My Lords, does the Minister agree that the main causes of the occupational pension funds crisis is a result of the changes to the ACT rules and the relaxation of the MFR requirements? If he does not agree, will he say what he thinks the causes are?

Lord Hunt of Kings Heath: My Lords, I believe that the changes in the MFR requirements were in accordance with the principles set out when the plan first came into being. I believe that I have covered the ground on advanced corporation tax. Many factors led to the problems which many pension schemes have faced, including the fall in the stock market and the actuarial revisions. I also think that the noble Lord's own government's decision on pension holidays was also a factor. Many factors led to this situation. We need to learn from that so far as possible and ensure that that cannot happen again. I believe that the actions taken by the Government—the legislation, the appointment of the pensions regulator, the protection fund and the long-term decisions that we will take in the light of the Pensions Commission—will ensure that we have a much stronger base for the future.

Small and Medium-sized Businesses

Lord Harrison: rose to call attention to government assistance to small and medium-sized businesses; and to move for Papers.
	My Lords, the Government have been good for small businesses. Their crowning achievement has been to run a sound economy, with low inflation and stable interest rates resulting in 54 quarters of GDP growth in the United Kingdom. Small firms are doing well, with 1,500 start-ups every working day. The business survival rate is also up by 2 per cent since 1967. The launch of the small business service, the strengthening of Business Link, the reduction of corporation tax and the creation of a single tax department are just some of the flanking initiatives that have reinforced that macro-economic stability. Each initiative has contributed to building into small businesses a growing confidence in the confidence to grow.
	But we cannot be complacent. The January CBI small and medium-sized enterprises trends survey saw a fall in the volume of new orders, so today's debate is timely in advance of the Budget and the forthcoming discussion of SME policy by the EU heads of state at the spring Council. Given that there is now a firm and welcome political consensus in this country that small firms are vital to Britain, and that a stable economy is central to their health, I welcome a debate on how we enhance the micro-economic climate to strengthen small firms—a debate, perhaps, that avoids the sterile ideological debates of the past, which saw the major parties too often forget, forgo or forswear the small-business sector.
	I shall talk first about the Budget and then about the European Union. I hope that my noble friend has read the two excellent pre-Budget submissions to the Chancellor by the Forum of Private Business and the Federation of Small Businesses, each of which brims with ideas worthy of serious consideration. I shall pick out but a handful. Will my noble friend clarify whether national insurance is a hypothecated levy or a general tax? Whatever it is, it is clearly regressive and a burden on payroll administration, and hence a disincentive to recruitment. Does my noble friend agree? As a Labour Peer, I celebrate the success of the national minimum wage and its carefully phased introduction.
	But the time is drawing near for us to find an equitable rate for the minimum wage, which can then be uprated annually in line with inflation. This would give to small firms the certainty to plan and expand.
	Similarly for business rates, which should be brought into line with the lower levels of business rates enjoyed on continental Europe. Does my noble friend harbour, like me, the particular anxiety that this can sometimes be an unfair tax, representing a disincentive to firms which need space as part of their core activity? The emphasis, of course, is on space and not on profits.
	I have two suggestions in respect of VAT. First, could my noble friend commend to the Chancellor a zero-rated VAT trading scheme whereby VAT is charged only at the final stage of consumption where all the previous traders in the supply chain are themselves VAT registered? This would cut out a spool or two of unwanted red tape. Secondly—an idea already being piloted in the European Union—I suggest the application of a reduced rate of VAT on labour intensive jobs. This will help the so-called "Lifetime" small firms, a sector often overlooked by policy makers. Let us be bold and introduce a phased approach to VAT registration. A series of gently rising hurdles is better than the "Fosbury flop" of precipitate VAT registration, which currently leaves too many small firms for the high jump.
	While I am on the subject of jumping through hoops, perhaps I may turn to the SME's ability to comply with legislation. Some commentators favour a system of exempting the smallest firms from some health and safety legislation, but I flinch at the thought of small firms being outside of the net of good law on health and safety at the workplace. A more fruitful approach is the phasing-in of commencement dates for compliance, giving small firms additional time to prepare for and finance compliance with new legislation. There is the additional advantage that small firms can then learn from the experience of larger firms, which may well be in their supply chain and already have gone down that path.
	Such phasing-in of the law is precedented by the excellent late pay legislation brought in by the Government. Can the Minister give an update on this legislation and tackle the continuing problem that many small firms face of having the fear of upsetting their relationship with the bigger firms they supply when requesting interest on late payment? This is a right that is not always being observed. Indeed, according to the research carried out by Leeds University Business School and the Federation of Small Businesses, some 2,200 publicly quoted leading firms in the United Kingdom are still flouting the reporting regulations which require them to publish the actual number of days that they take to pay on their invoices. Furthermore, does my noble friend recognise that payment periods have still not significantly shortened, as had been hoped? And yet there are larger firms, such as the fashion chain Next, which literally do just that—pay bills the very next day—and remain successful firms. Is it not time that their welcome practice became fashionable? What more can HMG do to strengthen the late payment legislation?
	That brings me on to another theme, which has been pressed upon me by, amongst others, the City of London's Mr Bruce Hunt and the FSB. Not all Acts of Parliament are excellent pieces of legislation. It is a hazard of our job that we, as legislators, like to legislate—it provides our raison d'être—so perhaps I may suggest to my noble friend how we might enshrine into law the Better Regulation Task Force's alternatives to regulation check lists. Requiring the Secretary of State to sign an affidavit on the face of the Bill that all alternatives to legislation had been studied and rejected as inadequate for the job in hand would have the salutary effect of making us pause and thoroughly explore the alternatives—including, on occasion, doing nothing.
	It was welcome news last week to learn that the OFT was reviewing the practices of supermarkets and whether their all-powerful position in the market place compromises fair competition and penalises small businesses—especially the corner shop, some 20,000 of which, since 1997, have indeed shut up shop. Will my noble friend look, in particular, at a situation which vexes smaller traders—that is, the off-shore VAT loophole whereby some supermarkets are channelling through the Channel Island of Jersey low-value consignments, such as cheap CDs and DVDs, thereby exploiting EU exemptions on charging VAT on goods in the €10 to €22 range? The Treasury is thought to be losing some £80 million a year from a loophole exploited by companies such as Tesco, ASDA and Amazon. What can be done?
	I know that it is not in his brief, but will my noble friend reflect on last night's passing of the Second Reading of the Education Bill, which will, of course, mean that more businesses will have a stronger interest in our schools? If that is the case, what more can be done to introduce, as it were, small firms on to the school curriculum and thereby encourage our young people to think that small business might represent a good idea for a career?
	Returning to his DTI responsibilities, perhaps I may raise with my noble friend the implementation of the waste electrical and electronic equipment directive, which has been dogged by yet another announcement last December of a fourth delay in its implementation. What is happening? This has spread confusion and uncertainty among small firms. Will my noble friend ensure that the small chemical firms are not snowed under by red tape in applying the otherwise very important REACH directive?
	Perhaps I may now turn to the advice given to small businesses and Business Link. I hope my noble friend will take time to study the Cambridge Centre for Business Research's recent survey which suggests that Business Link has successfully established itself in the business community but perhaps should focus less on so-called hard targets, such as growth and profit, and more on soft help—such as brokerage—and putting firms in touch with each other which can literally forge business links. I also would endorse my noble friend's consideration of the CBR's view that devolving Business Link to the RDAs may not be wise.
	I turn now to the issue of women and small businesses. Statistics show that women are more successful than men in sustaining a small business once the hurdle of starting up has been surmounted, but few of them go on to grow into bigger businesses out of the small acorns that they plant. These glass doors to entry and the glass ceilings to progress are still representative of a debilitating prejudice against women's businesses. But things are on the move. I attended the All-Party Parliamentary Small Business Group meeting with the EOC to discuss the Work and Families Bill. I think that the Government are taking positive measures there to cut the number of the estimated 30,000 women who at present lose their jobs because of pregnancy and restore to them the ability to contribute to small businesses.
	Turning to the EU, does my noble friend acknowledge that the single European market is itself in danger of going into reverse because of the rise of narrow nationalism on continental Europe? The services directive, for instance, is serviceable, but hardly the best that we could have done. In the light of the tide of nationalism, I encourage Her Majesty's Government to renew and redouble their efforts to press on with the Lisbon agenda. I am alarmed, however, by the Government's hesitation, in the face of some virulent, home-bred anti-EU prejudice, to roll out the Euro Info Centres network, whose prime task is to cut to the quick the advice given to small businesses about EU initiatives appropriate to their needs. Can my noble friend report on what is happening to these important Euro information centres?
	Before I leave the subject of the EU, I pay tribute to other British initiatives promoting small firms in the EU, including the Small Business Bureau and the British Chambers of Commerce link-up with Microsoft to focus on the small business environment and raise awareness of e-security. I welcome the ACCA's focus on such issues as access to finance and to publicising Eurobarometer's statistic that half of all owner-managers still find difficulty in accessing loans from high street banks—an old sore. The Minister should also come down like a ton of bricks on our EU partners who, according to the Commission's European single market scoreboard, are still falling woefully short of applying legislation that has been agreed at Brussels. If we are not serious about completing the single market, why should small firms compete in it?
	Finally, I celebrate the creation of the Genesis Initiative, begun by my noble friend Lord Randall. It brings together small firms and their national federations within the EU to ensure that Europe is indeed open to small businesses.
	I deviate here just to make mention of the Legislative and Regulatory Reform Bill. This has a very worthy purpose in trying to cut down on the amount of old legislation, which needs to be weeded out. We need to slash and burn the red tape that impedes our small businesses, but not on the pyre of parliamentary scrutiny.
	In that spirit, I hope that we can engage in a useful debate on small businesses and improve that micro-climate in which they can thrive and prosper. I beg to move for Papers.

Lord MacGregor of Pulham Market: My Lords, I congratulate the noble Lord on securing this debate and particularly welcome the subject he has chosen. I was one of the very first Ministers for small business—or, as it was unkindly described, the small Minister for business—in the early 1980s. A lot of the measures to which the noble Lord referred had their origins in many of the measures we introduced in the early 1980s—the loan guarantee scheme and the small firms service, the predecessor of venture capital trusts. I could go on and on. I want to pick out three features of that period which struck me.
	The first was the need to bring about cultural change in the attitude towards small businesses and the self-employed. There was apathy at best, often antipathy, to that sector. Secondly, I found that as I was going round the country explaining all the measures we had introduced, the reaction from local government and the general business community was, "Why are you spending so much time focusing on small businesses? It is only the public sector and large businesses that actually create jobs". We have learnt since that it is the other way round—the small businesses have created so many of the jobs in the private sector.
	The third aspect was the educational point; the noble Lord referred to it, and I particularly agree with it. We were trying to encourage enterprise and risk-taking and to see the prospect of good careers in small businesses and self-employment brought home in the schools. It simply did not exist then, and I had to do many things to try to bring that about. I learnt then that there is such a range in the small business sector that one could talk for ever about self-employment or companies employing 250 people or more.
	I can make only two points today, but first I want to say a word about the general background. The enterprise culture is much stronger today. It is a measure of how far we have come that a noble Lord from the Labour Back Benches has initiated this debate. He talked about a consensus; I can tell him that in the early 1980s, there was no consensus. It was our government who were pushing the case for small businesses and the self-employed, often to the then Labour opposition. The noble Lord would not have initiated such a debate in the early 1980s, and I am delighted that he has done so today. But we still have a long way to go, and I particularly agree with him on the educational front.
	We are now in a new environment. The new threat to continued expansion of the SME sector is the globalisation of the world economy and the huge new competitive pressures that we are facing, especially from India and China. A substantial proportion of our manufactured goods are coming from there. I believe that it is a considerable factor in the low inflation environment in which we live, and clearly the consumer benefits most of all. We are in a particularly benign period. It can be envisaged that those countries and the businesses in them will exercise their muscle as they see their growing ability to gain sales, and so on. If there is a currency change in those areas, we may well find that the cost of the goods coming in ceases to be so low. We need to ensure that our SME sector continues to grow and is not wiped out by these low-cost economies.
	The impact on the small business sector is considerable. We know about the loss of so much manufacturing, but much of this has been associated with small businesses and the jobs that go with them. It is no accident that much of the dynamic of the small business sector in this country is in the service industries.
	It is not just a question of the low cost—these competitors come from a less regulated environment. This brings me to my first point, where I agree very much with some of the noble Lord's points. The Institute of Directors has 53,000 members, more than 75 per cent of whom are in SMEs. In a recent survey it carried out, asking which were the most inhibiting factors to the growth of those businesses, the regulatory burden came out top, with 57 per cent responding. It was way ahead of government assistance or anything else.
	I have also been through a lot of the detailed case studies that were carried out on the back of that result. There is a heavy financial and managerial burden of regulation on big firms. They can withstand that, but small businesses cannot. I do not have the time to go into detail, but the list of areas where burdens affected business was impressive. I do not underestimate the difficulties of dealing with this. There is always a justification for new regulation; there is always pressure from the media and elsewhere. There is media condemnation if the Government do not act; there is endemic gold-plating, not least in this country, from European initiatives. I well understand that Ministers and civil servants often judge themselves by the amount of legislation they take through and the amount of response they give to pressures for further regulation.
	We need a cultural change in the media and in public debate so that there is as much emphasis on wealth creation as there is on the constraints on and criticisms of the wealth creators. I have two or three things to say in this regard. One way of getting that cultural change is the emphasis that should be put, and is being put, on regulatory impact assessments before anything comes before Parliament. I should like to see particular emphasis on the burdens on the SME sector. It is also important to have post-regulatory impact assessments so that we look at the impact of regulations and other things that we have put through.
	The Better Regulation Task Force talked about "one in, one out". Departments should not introduce a new regulation without destroying or removing a regulation at the same time. I well understand the difficulties involved in that, but nothing has happened, and I believe it is a discipline that should be adopted as far as possible. Ministers and departments need to be judged on their success in achieving it. In other words, what a lot of small businesses are saying is, "Get off our backs" or, as my noble and learned friend Lord Howe of Aberavon constantly puts it, "For God's sake, leave us alone". One might almost say that the biggest growth in employment under this Government has been in the public sector, where success is often judged by how meticulously one carries out one's regulatory role, and whose salaries are paid for by the private sector firms on which it piles the pressures. I know that that is a caricature—I can pick holes in it as much as anyone—but there is some truth in it.
	The second point to which I draw attention is the position of venture capital trusts. I declare an interest as an investor in one or two, and as a non-executive director of a firm which has a minority interest in one group. In 1983, I encouraged the setting-up of the British Venture Capital Association, which is now flourishing. Private equity-backed companies are now making a major contribution to the economy and its competitiveness.
	During the five years to 2004–05, the number of people employed in the UK by the private equity-backed companies increased by an average of 14 per cent per annum as against the national private sector employment growth rate of 0.3 per cent. Those companies employ 2.9 million people in the UK, which is 19 per cent of UK private sector employment. I could cite many other factors to draw attention to the growth and success of private equity-backed companies.
	More than three-quarters of private equity-backed companies believe that without private equity the businesses would not have existed at all or would have developed less rapidly. Venture capital trusts are only one part of this, but they play a significant role by concentrating on providing seed corn to companies at an early stage of development, especially in the innovative, high-tech and often high-risk sectors. I hope that the Chancellor will maintain the 40 per cent tax relief for investment in the VCTs. He should certainly do so for the year ahead, while further evaluation of how effective it has been in creating jobs and helping those companies is done.
	It is also necessary to change the limit of £1 million for investment in an individual company and the restriction on gross assets to only £15 million. That was imposed in 1995. There is clear evidence that it is companies above that level which need the venture capital investment. The limit has not even been indexed, and it needs to be looked at again.
	My final suggestion is a government initiative on public-sector purchasing from small companies. I looked at this idea way back in the 1980s, but there were not enough small companies then to respond to it. However, in the United States, the Small Business Administration has been charged since 1953 with ensuring that small businesses win a fair proportion of government contracts. Today, 23 per cent of the $200 billion federal budget must be spent with small businesses. Small businesses need income as well as equity. It is time to look again at this idea, because it would be of considerable help to many of those hi-tech, small companies.
	I am delighted that the noble Lord has introduced this debate, because the emphasis on small businesses is absolutely right.

Lord Dykes: My Lords, the noble Lord, Lord MacGregor, made many valid points, one of which was that—I do not in any way wish to offend our Labour Party colleagues on the government Benches—a Labour MP or Peer would not normally have raised a subject such as the future of small businesses in the old days. I am sure that they did from time to time, but one did not notice it so much. Since 1997 and the Government's self-evident commitment to business, there has been a total change. I suppose that there is now a meeting of minds between the main political parties in this country that small businesses are crucial. I thank the noble Lord, Lord Harrison, for initiating this important debate. Given his experience in the European Parliament, I might try to deal with a few European points later on, as did he.
	The detailed Written Answer which Alun Michael, the DTI Minister, gave to Mr Barry Sheerman in another place on 12 October last year provided a helpful working definition of the role of small businesses. It sounds trite and axiomatic, but it needs to be repeated many times to remind us all about the importance of small businesses. I use mainly the word "small" rather than "medium", whatever we think constitutes a medium-sized enterprise. Mr Michael said:
	"Small businesses make a major contribution to the health of the economy, helping to boost productivity, increase competition and innovation, and generating employment, which is why the Government's aim is to make the UK the best place in the world to start and grow a business".—[Official Report, Commons, 12/10/05; col. 505W.]
	That is a valid quotation and it should be remembered by all of us. It is a difficult business environment for large-population countries in the European Union such as Britain, France and Germany to create. One would expect it to be achieved more easily in smaller countries and in countries that are so small that they can easily make themselves into tax havens. Ireland is an example of a smaller-population country where that transformation in the way in which the promotion of small businesses is thought about—along with larger business which have come to Ireland in recent decades—has been a notable feature.
	As a Liberal Democrat, I like all that part of it, but I do not like it when it approaches the excessive hire-and-fire American mentality, which one is also seeing in the Republic of Ireland. I hope that one will not see too much of that in Britain. The essence of small businesses is that they should be part of the community, even where they have a small number of employees. Those employees, who one hopes would become shareholders and directors as well in those various small businesses, should have confidence in the possible continuity of the business, depending on what it is. However, businesses come and go. As we know, that is the law of marketplace. There is nothing that one can do about that; that is the hidden hand and we have to accept it.
	In the same Written Answer, Alun Michael rightly referred to Business Link and all its activities. As he said in his lengthy Answer, it provides,
	"support to over 670,000 businesses. Nearly 500,000 of these were existing businesses, the remainder, individuals thinking of, or in the process of, starting up a business".—[Official Report, Commons, 12/10/05; col. 503W.]
	That is an enormous number. I hope therefore that large companies have the grace, which they often do, to admit that small businesses are the lifeblood of this country. Napoleon said that Britain was a nation of shopkeepers, but, even in those days, it was also a nation of interesting small businesses. Farms are increasingly becoming small businesses too during the painful transition that they are now experiencing. They need help as well.
	I have with me the Business Link's No-Nonsense Guide to Small Business Funding. I am sure that there is still a Macmillan gap in this country, which was discussed in that famous investigation under the Harold Macmillan government of the gap in financing for vulnerable, emerging ventures with seemingly shaky credentials. That was because they and their ideas were new. That gap persists, although one could say that the range of financial intermediaries now offering assistance to companies has grown in variety and scope.
	I commend the document. I thank the Government for having encouraged it. It is very easy to read. We all know the traditional adage that if you are a genuine entrepreneur you do not need this panoply and framework of assistance, and the bureaucracy and advice from governments and their underlying agencies, that you can do it yourself. But the small business federations know that that is not true. This is a co-operative partnership between Government, local authorities and, now, regional authorities more and more to help businesses. The way in which the document is written is encouraging, unlike the turgid documents one used to receive in the old days.
	We need to tackle the Macmillan gap which still exists even if it is, relatively speaking, on a somewhat smaller scale. Not all brilliant, innovative ideas are taken up by the banks. That can be frustrating for interesting, new, innovative small businesses because the banks can react over-cautiously or deter applicants by asking for excessive, almost existential, security collateral which, naturally, puts off people when they realise that their own family would be at risk from the collateral they are asked to supply at the very early stages of the creation of a small business.
	I refer to the question of European aid. It is my primordial interest and responsibility as spokesman of this party for the EU. Although some would say that this must be, inevitably, mainly a national effort, focused on the United Kingdom's own national services for encouraging small businesses, the European Union and the Commission have a great role to play. As Members of this House who follow these matters will know, that includes direct aid to businesses, mostly—I believe I am right in saying—if they are directed towards trans-national purposes in their endeavours.
	There are many small businesses—now, inevitably, mainly on the Continent because the Channel divides us. In Kent and north-western France there are interesting examples of new small business co-operatives. There is a lot of co-operation and activity between Kent as the county council and the Nord Pas de Calais departmental council and region of that area of France. They are working closely together to encourage enterprise and innovation on a small and medium scale. I believe that those matters should develop rapidly in coming years. In the 10 new member states many people want to be involved in individual and small-group entrepreneurial exercises, encouraging small companies. The Polish plumber in the UK, Germany or France—Polish plumbers are accepted psychologically more now in France, even though numbers may be small, as in this country—will probably develop businesses rapidly and become numerous Polish plumbers as the movement of working small-business immigrants continues throughout the Union.
	The structural funds are provided directly through the national bodies—

Lord Vinson: My Lords, I thank the noble Lord for giving way. Before the noble Lord passes from the benign or otherwise influences of the EU, would he care to mention that the surveys of small firms, and many larger ones, show that over 40 per cent of the regulations that they find so inhibiting and damaging come from the EU? I imagine that that more than counterbalances any of the aid which it gives to Europe in the first place, which is redistributed back to this country and falls finally, if at all, on small businesses. There is a huge negative flow of so-called help from Europe of massive over-regulation. I hope that the noble Lord will mention that before his remaining two minutes are up.

Lord Dykes: My Lords, that is a tendentious comment made by people with an axe to grind against Europe. I do not accept it. If one takes the evidence given by people who are asked properly about the service of the European Commission and the Union, they welcome them. Time does not allow me—particularly after that intervention, with which I do not agree—to go into the details of these matters.
	In case the Minister has a chance to respond to these matters later, perhaps I may ask what is happening with the Marco Polo programme in the European Commission range of subjects. That seems particularly interesting. I refer also to EUREKA, a network for market oriented R&D. That is at its very early stages and, therefore, there cannot be a lot of criticism if the Commission is not promoting itself. I welcome an answer to the question posed by the noble Lord, Lord Harrison, about what the European information centres are achieving.
	In conclusion I refer to two major areas. I apologise for the inevitable brevity. The European Investment Bank deals only with large corporate investment projects. I should like the EIB to be able to deal with smaller and medium-sized businesses, allowing for the practicalities of arranging the modalities of that kind of support programme. Perhaps the Minister will have time to deal with that issue.
	Finally—inevitably, it is an axe to grind but an important one—when one considers the expense which small businesses entail in Britain changing into the euro currency, and vice versa, it is time now that the banks reduce their charges to small business for that kind of service. Is it not even better if the Government decide at long last that they can be bold and brave enough to join the euro?

Lord Cobbold: My Lords, I, too, thank the noble Lord, Lord Harrison, for introducing this important subject today. It is topical, too, because today sees the publication by European Union Sub-Committee A, of which I have the honour to be a member, of its report entitled A European Strategy for Jobs and Growth, which updates progress on the so-called Lisbon agenda and is aimed at the forthcoming spring ministerial meeting. The Lisbon agenda dates from the year 2000, and was a bold initiative to reform Europe's national economies to improve their performance and close the gap with the United States by 2010. At the halfway stage last year it was recognised that little progress had been made, and the agenda was relaunched with greater focus on the key economic priorities of more jobs and growth. That is where small- and medium-sized enterprises come in, because SMEs are a vital key to both job creation and growth.
	In its written evidence to our committee, the Federation of Small Businesses quoted from a 2003 report by Trends Business Research, which claimed that during the period 1995-99 SMEs were the major job creators in the UK. Furthermore, the very smallest firms of one to four people contributed most to job creation. The statistics are impressive. There are an estimated 20 million SMEs in the European Union providing employment to 65 million people, equivalent to two-thirds of total employment and approximately 65 per cent of GDP. The European Commission, in its most recent annual report on the national action plans, which are submitted by member governments in accordance with the Lisbon agenda, underlines the importance of SMEs and suggests five measures that should be taken to promote their growth.
	I quote from our report:
	"By 2007, Member States should each set up a 'one-stop shop' to assist future entrepreneurs and allow businesses to fulfil all administrative requirements in one place . . . The average time to set up a new business should be halved by the end of 2007, and then to one week or less . . . Entrepreneurship education should be provided as part of the school curriculum for all pupils . . . Each Member State should properly measure administrative burdens, while the Commission will propose ways to reduce costs on businesses arising from EU rules . . . The Commission will remove the obligation to notify certain categories of small state aids, which it believes should help SMEs".
	Those are all admirable objectives, recognising the importance attached to SMEs at the European level, but it is up to national governments to put the recommendations into practice. The UK has a reasonably good track record. For example, we have the highest VAT threshold of anywhere in Europe, at about £60,000 turnover. There are problems with VAT, which have already been referred to. We also provide five days of enterprise teaching to all pupils aged between 14 and 16.
	Inevitably, though, there are some negative factors. I have one example from personal experience, and here I declare an interest as an owner-operator of a tourist business in Hertfordshire. Like many small businesses, we employ a relatively large number of casual staff on a seasonal basis. This year we learn that we are required to pay holiday and sick pay to our casual employees. This seems to be an unjustified extra expense, and is a considerable administrative burden.
	Reverting to the positive, I shall mention one area that I believe is very important: the link between university research departments and commercial development, the all-important conversion of new ideas into viable businesses. For that purpose several universities have already established innovation centres that assist in the creation, funding and growth of new businesses. In his written evidence to our sub-committee, Mr Walter Herriot, managing director of the St John's Innovation Centre in Cambridge, reminded us that:
	"R&D turns money into ideas, innovation turns ideas back into money".
	I am very fond of that phrase.
	I know the Government take this subject very seriously. Indeed, in his verbal evidence to our sub-committee, Mr John Healey, Financial Secretary to the Treasury, stated that:
	"The responsibility for encouraging greater collaboration between universities and business . . . has been given to our regional development agencies, who are set to invest this year probably in excess of £300 million across nine regions to support this sort of move".
	The importance of SMEs to our present and future economic health cannot be overstated, and I trust that in his reply the Minister will confirm the Government's strong commitment to that sector at both national and European level.

Baroness Howells of St Davids: My Lords, I, too, thank the noble Lord, Lord Harrison, for raising this debate, which gives the House the opportunity to debate medium and small businesses. Despite all the regulations referred to by other noble Lords, I feel confident about this debate because I know I have a good story to tell, as I speak of the Caribbean black businesses. I am a patron of the European Federation of Black Women Business Owners set up by Miss Yvonne Thompson CBE. At present, the register is about 15,000, and we suspect that the number of millionaires is around 800 and rising.
	The birth of the black business sector is fairly recent but nevertheless remarkable. First-generation migrants saw education as their most important goal for their children. By the 1970s, it was becoming increasingly obvious that an economic base was critical for sustainability. There was much discussion among the community, seeking ways to bring this about. Several conferences were held and many attempts at niche businesses began slowly to appear, using the skills already in the community to facilitate entrepreneurship. The biggest problem was finance. I recall one conference at which a young bank manager said that he,
	"did not lend money to black people on principle".
	We never heard what the principle was.
	Despite such amazing arrogance and many obstacles, the present-day story is one of success. A study by the London Development Agency found that 8 per cent of British black women have an interest in starting their own business. The range of businesses is also significant, from funeral directors to radio station owners, hairdressers to PR consultants, care homes to retail shops. There are also many builders. The list is endless, both niche and mainstream. The Government's objective of increasing small business is reflected in London by the LDA's enterprise programme, which includes a range of activities at various levels to support small businesses.
	Sarajeet Soar, in an article in 2001, written for the book, Community Economic Development, noted that national programmes to promote ethnic minority businesses are reactive, ill-conceived and badly targeted. That may still be so, but the European Federation of Black Women Business Owners has accepted that the Government can only do so much and is acting as an enabler itself. It organises events that connect and inspire minority businesses, such as breakfast meetings, conferences and award ceremonies, the object being to explore and explain government initiatives. Business networks are formed to support both existing and potential businesses. There is also training for business advisers, providing tool kits to access finance through the Government's small business schemes and to encourage banks to be more flexible. Microfinance and business enterprise has helped entrepreneurs to break out of a real poverty trap, enabling them to provide better living standards for their families and home ownership away from the run-down estates of first-generation migrants.
	The United Kingdom has benefited from the competitive advantage of diversity. Productivity has been enhanced. The United Kingdom is able to sustain a key role in terms of both the national and international economy. There is now empirical data to show that diversity and economic strength are interrelated, on which the Minister might like to comment in summing up.
	However, some problems are still around. We need policy makers to realise that it is both useful and appropriate to treat certain groups as a special category—such as in horse racing, where handicaps are quite normal, I believe. It is clear that there is need for special business support, and that it is greater in some ethnic communities than in others. On the question of finance, it is accepted that black minorities are not now disadvantaged in terms of start-up capital from banks and other formal sources. This applies to their propensity to raise some finance from their own communities. The African Caribbean community still has less success in accessing bank loans to expand its businesses. In view of that, it would seem that the Government need to make African Caribbean black entrepreneurs a greater area for proactivity in sustaining their businesses in the second and third years of trading.
	Despite these many remaining obstacles, I believe that the Government have done well. I am quietly confident that this country will see a growth of entrepreneurship among the younger generation aided by technology and that it will sustain diversity as a business asset within the United Kingdom.

Baroness Byford: My Lords, as always, it is a great pleasure to follow the noble Baroness, Lady Howells of St Davids. It is good to hear news of business success in her community, and we congratulate her on that.
	I thank the noble Lord, Lord Harrison, for introducing this debate, and it is good to be able to participate in it. The noble Lord takes a great interest in small and medium-sized businesses, and he paid tribute to what the Government are doing for small businesses. I listened to his speech with great care and made a list of up to 10 things that, rightly, he hoped the Government would do. I want to highlight one or two of them as I think they will be referred to by other speakers and obviously they have a direct effect on small businesses.
	One is the growth of the minimum wage and its effect on small businesses and on the employment of women in some very small businesses, including those in rural areas. The noble Lord also mentioned business rates—a matter of great concern. VAT was another item that he placed on his wish list. The subject of late payments or the payment window is enormously important. Small businesses are often fobbed off in that regard but they are least able to carry that sort of burden. The Government may well say that they understand that there is a problem, and perhaps the Minister will comment on that. Late payments, in particular, are a great burden.
	The noble Lord also touched on a matter of great interest to me: supermarkets and convenience stores. I would add to that those who supply them. It is all very well for supermarkets to be told by smaller shops that they have control but, ultimately, it is the people who supply them in the first place who end up at the bottom of the heap.
	Another point made by the noble Lord that I wish to pick up is the regulatory burden. My noble friend was right to imply that 40 per cent of that burden comes from the EU. I do not think that that is a political statement; it is a fact, and it is one that needs to be addressed. Most businesses will say, "We are happy to get on and do business but we don't want to be burdened with regulation. We accept that some regulations should be there but, if we can minimise them, so much the better for all of us".
	This is an important debate. Small businesses are crucial to the success of business in this country in the long term. The Small Business Service estimated that at the start of 2004 there were some 4.3 million businesses in the UK. Small and medium-sized enterprises together accounted for more than half of the employment—58.5 per cent—and a turnover of 51.3 per cent in the United Kingdom. So we are not talking about small beer; they are very important businesses.
	I return to the matter of burdens. The burdens barometer of the British Chamber of Commerce showed that by last year the cost of regulation had risen by £14 billion from £38.5 billion to £52.7 billion since 1998. Regulations cost £10 billion in 2001 and they have now increased more than fivefold. An average of 15 new regulations are made every day—an increase of 52 per cent since 1997. The one thing that business can do without is yet more burdens.
	I want to mention, in particular, the employment of women. I have a good friend at home who runs an extremely successful beauty and hairdressing salon. That is particularly important because she employs a lot of female labour. Some of the regulations that are coming out relating to the employment of women who take breaks to have children are becoming very burdensome for that type of business.
	I also want to refer to business support schemes. In a recent report, the CBI criticised the Government for failing to offer adequate support for small and medium-sized enterprises. The CBI said that the grants and support schemes on offer were "confusing and inconsistent". It estimates that there are just over 2,500 different schemes on offer in England alone, but said that,
	"no one can really be certain".
	Where grants and so on are available, can we also simplify them? Far too much time is being spent trying to research what can be obtained and from where. There should be a simpler way.
	I mentioned payments earlier, particularly as I wish to put a rural perspective on this debate. Noble Lords who have listened to us know well that we have been chasing up the whole question of the single farm payment and delays within the Rural Payments Agency. In a Written Statement today, which I am very sorry was not an oral Statement, the Secretary of State, Margaret Beckett, announced the replacement of Johnston McNeill as the head of the RPA by Mark Addison on a temporary basis. That has been in response to the debacle going on in that agency, but the smaller farmers get hit the most. The noble Lord referred to them as small businesses; they are indeed businesses, not there for the good of their health.
	On Tuesday, the RPA gave an update on current processing, with the total number of fully validated claims a mere 58 per cent so far. That means that approximately 69,800 claims have been fully validated but 50,600 have still not been. Earlier last week, I spoke to a near-suicidal lady who has submitted her claims for mapping. Her mapping had then been sent back and corrected but when the next lot came back, more fields had been missed off. It is beyond a joke; I cannot speak strongly enough about that.
	The RPA reported that, as at 14 March, only 7,539 claims had been paid, a mere 6.2 per cent. We were told that the bulk of those claims would be paid by the end of this month, but only 6 per cent have been. The RPA says that it has issued 32 per cent of confirmed statements, leaving around 67 per cent not validated, with a small number still to be sent out. Where are we going there? It is a real disgrace.
	I had a longer speech, but have had to cut it. Remaining on the rural scene, I will refer to rural post offices, which the Minister and I have talked about, over the counter, ad infinitum. Royal Mail has now admitted that it could be left with just 4,000 post offices because, while a decade ago 90 per cent of Post Office business came from the Government, by 2010 it estimates that will only be 10 per cent. How is that going to be effected? Mainly, perhaps, by the suggested withdrawal of the Post Office card account.
	The Minister is well aware of my berating him on this topic. We warned him, when he brought the Postal Services Act 2000 through, that that would happen. It is a shambles, and something over which the Government should really hang their heads in shame when post offices are so key, particularly in rural areas. The banks and many rural shops have gone, yet the post offices are still there—though for how much longer, we do not really know.
	Lastly, I return to the question of supermarkets and convenience stores. I attended the Association of Convenience Stores meeting last week; its figures are chilling. As has already been said, some 2,000 small shops have disappeared since 1997. However, of the garage shops and those convenience shops that go with them, some 800 closed last year. They seek fairness and competition, but they do not think that they are being fairly treated. They do not see why the low cost of selling should put them at risk. They look to the land banks that some of the bigger supermarkets have acquired and the planning permission that has been granted by local authorities.
	My last point concerns extending Sunday trading hours. The noble Lord, Lord Harrison, has given us an opportunity to raise it today. I am extremely grateful to him. I hope that, in putting the rural perspective, it will raise the issue with your Lordships because so many rural small businesses play a major part in the success of business throughout the UK.

Lord Williams of Elvel: My Lords, like other noble Lords, I am grateful to my noble friend Lord Harrison for securing this debate and introducing it so eloquently. By the way, if I may say so, it was rather cheeky of the noble Lords, Lord MacGregor and Lord Dykes, to say that we were not interested in small and medium-sized enterprises when we were in opposition. I remember when I sat exactly where the noble Baroness, Lady Miller of Hendon, sits when I covered the DTI portfolio, and I am glad to see the noble Lord, Lord Vinson, in his place because he will remember this. I kept banging on and from time to time I made pacts with the noble Lord, Lord Vinson, to ensure that these matters were duly debated in this House. Of course, the noble Lords, Lord MacGregor and Lord Dykes, were not here at the time.
	This is certainly an important matter and, as other noble Lords have pointed out, small and medium-sized enterprises are great generators of employment. The number of jobs created by start-ups is estimated to double in Wales over the next five years. At the moment, 7 per cent of the Welsh adult workforce—95,000 adults—work in small and medium-sized enterprises, so the importance of the matter should not be underestimated.
	I will be relying very much on a survey that has been conducted by Babson College and London Business School, which was published last week. It measured the level of entrepreneurial activity between countries and between regions within those countries, and what makes a country or region entrepreneurial. The survey used a measure entitled the total early-stage entrepreneurial activity rate—if noble Lords can get their minds around that rather complicated expression. In the United Kingdom, we are more or less in the middle of the range of countries covered in entrepreneurial activity. We are better, oddly enough, than Germany, France, Austria and the Netherlands. We are worse than Ireland, Australia, Chile, Brazil, the United States, China and, going right up the scale, Thailand and Venezuela.
	Wales has lower entrepreneurial activity than other regions in the UK apart from the north-east and the north-west. In comparison with similar economies in the world—New Zealand, Iceland and Ireland—we in Wales are badly failing. On the other hand, we have some pluses. The survival rate of start-ups is higher in Wales than in London and the south-east. The Welsh are more optimistic about their future in small enterprises and less worried about the possibility of failure. East Wales and, notably, mid-Wales, where I live, seem to be doing rather better than west and south Wales. Alas, to return to something that the noble Baroness, Lady Byford, and my noble friend Lord Harrison said, the number of women on start-ups is only half that of men, which we need to address.
	Other minuses are that a large proportion of the start-ups are from immigrants or in-migrants either from England or, oddly enough, from Northern Ireland. We have fewer start-ups from ethnic migrants from other countries either in the EU or outside it, so there is also a relative paucity of what are known as business angels—private individuals who will support new businesses as and when they come for funds.
	Much of this is a matter for the Welsh Assembly Government. I do not wish to tread on toes, but it is clear that in Wales—a paradigm for the rest of the United Kingdom—we have to encourage the pluses and try to reduce the minuses for start-ups. As noble Lords have said, start-ups will provide a major source of employment in years to come.
	First of all, there is the importance of education. I shall go back in history for those of us who remember. The tremendous upsurge in the West German economy after the war was almost entirely due to the mittelstand, middle enterprises. This was, not least, because the Germans of the day were educated into an entrepreneurial activity, because their families had been in the same businesses for generations. Education—vocational training—is vital to make sure that people understand about starting up a new business and how to get involved.
	An odd feature of this report—it is true of Wales and, I imagine, of the rest of the United Kingdom—is that those with a master's degree are much more likely to take the risk of going into their own business than those without one. The difference is statistically established. Therefore, we must try to get more people to take master's degrees if we want this sector to flourish.
	Then there is the question of relative youth. As is probably true of the rest of the United Kingdom, in Wales those in the 18-to-24 age group are much less likely to start their own businesses than the older age group. They are not risk averse. A lot of them say that they would like to start their own businesses, but are worried about starting a career that may end in failure at the age of 30 or 35, when it is difficult to get a job with an established company. Something needs to be done about that and I will come to what I think might be done.
	As many noble Lords said, we have an upsurge in regulatory burdens. The problem in Wales is that these regulations are frequently in two languages, which makes filling out these forms even more difficult for those who speak neither Welsh nor, sometimes, English very well. That is a simple and practical problem, but something we have to address.
	When I was sitting in the place of the noble Baroness, Lady Miller of Hendon, I used to complain about the regulatory burden, the lack of finance, the political leadership and the services available to small businesses. I was usually stonewalled by the then government Front Bench. The arguments are, I am afraid, still the same.
	As far as finance is concerned, I appreciate what the noble Lord, Lord MacGregor, said about venture capital trusts. It would be a good idea to encourage the major clearing banks of this country—which, after all, are making tons of money—to allocate a certain percentage of their profits to the sort of venture capital trusts that he described. It would not be difficult for the banks. They could even be given tax relief. They would not have a problem with cash flow. They would be able to pretend and even put themselves about as being virtuous, which sometimes banks need to do. They would be seen as pillars of job creation in the community. I would have thought that that was a worthwhile idea for the Minister to study.
	There is the question of the services available. In Wales we suffer, for instance, from broadband not being available throughout the country. That is an important service for small businesses. In mid-Wales, half the county of Powys has no broadband at all. Somebody—I say to the Minister—ought to invite BT to pay a little more attention to those areas where there are positive possibilities for starting up enterprises, and encourage it to extend its broadband range there.
	Finally, I believe that it is possible to improve on what we are doing at the moment. I do not think that what we are doing is bad—we are in the middle of the range—but it is possible to do better. If we were to do better, we would not just double the number of people in work in small and medium-sized enterprises, but treble it. That might go some way to mitigating the problem with pensions that exercised your Lordships earlier this afternoon.

Baroness Cohen of Pimlico: My Lords, I too thank my noble friend Lord Harrison for introducing the debate. I intend to talk about the Alternative Investment Market. That market was not, in fact, initiated by government, but it has most certainly been actively nurtured, given a favourable tax regime and defended from rather heavy-handed regulatory proposals, which were introduced by the European Commission in the early stages of the financial services action plan.
	That market, which perhaps is not widely known to your Lordships' House, is of vital importance to the growth and development of small businesses in this country because it is the mechanism that enables many small and medium-sized enterprises to find the finance to grow and become larger businesses. AIM was designed and is regulated by the London Stock Exchange. I remind the House that I have the honour of being a director of the London Stock Exchange, as noted in the register. Indeed, I have had that honour since 2001, since when, barely a day has passed without someone bidding for us.
	One of the many reasons why we are so attractive to bidders is that jewel in our crown: the Alternative Investment Market. In the development of any commercial enterprise there comes a moment when it needs more cash than the family resources can find or than the banks will lend, and outside finance has to be sought. Historically, before the Alternative Investment Market, this was the point when many businesses failed or stagnated because they were simply not big enough to stand the expense and regulatory demands placed on those wanting to put their companies on to the main market. Even among those who succeeded in getting their companies on the main market, there was a long steady history of failure because those companies were too early in their development to deal with the demands and tensions placed on them.
	The development of AIM, which started as recently as 1995, was to fill a gap which is not entirely coterminous with the Macmillan gap but has something in common with it. That is why the Stock Exchange introduced AIM with an initial 10 companies. The intention was to make this a market which enabled small and medium-sized companies to gain visibility and to raise money as quickly, cheaply and informally as possible. Companies entering AIM are introduced by a nominated adviser, rather worryingly always abbreviated to NOMAD. There is no minimum size required of those companies and they do not need to put any of their shares out to public issue, which is often useful if one is a founder wanting to grow one's company before selling bits of it off. Also, they do not require a trading record.
	That is by contrast with a company that is trying to put itself on the main market. Such a company has to go through the long, time-consuming process of producing a prospectus, which is now regulated by the UK listing authority. Companies in that position must have £700,000 in equity capital and a minimum of three years' trading record. As one can see, it is really quite demanding and well beyond a small company that wishes to raise some money.
	In the past 10 years, AIM has become an important part of the UK financial architecture, playing a vital role in delivering the Government's enterprise agenda and providing a valuable staging-post to companies moving between private equity financing and full listing. It has grown phenomenally from 10 companies in 1995 to over 1,400 today and it now supports the capital-raising needs of 1,200 growing businesses from all across the United Kingdom and 226 international firms from 25 different countries. It is quite difficult to imagine what we did without it. It has developed into a national asset. A leading accountancy firm called it,
	"the most successful small to medium cap market in the world".
	AIM is now the second-largest European market, by number of companies, and I shall allow you to guess which is the largest European market. It is indeed the London Stock Exchange. AIM has become so successful that it is attracting attention from our European colleagues. In a speech last year, the former German Finance Minister, Hans Eichel, described Germany's flotation of growth markets as a painful experience and said that the Ministry of Finance was looking closely at trends in other countries where the ability to raise capital for young, innovative companies worked more efficiently. He singled out AIM as a successful model. In another recent study by the respected US think-tank the Milken Institute, the United Kingdom came first for access to capital for smaller companies. The report made specific mention of the United Kingdom's vibrant equity markets as a reason for its success and AIM is a fundamental part of that.
	The point of AIM is that it is justifiably very popular with investors. They welcome the opportunity to invest at early stages. They are glad to have companies drawn to their attention and their faith has been justified. What makes the market so successful where markets such as Germany's Neuer Markt failed? First, it is diversified. AIM has companies in 33 sectors from oil and gas to software and computer services; from speciality finance to pharmaceuticals and biotechnology. It is not immune to market turbulence; nowhere is, but the broad base of business sectors has enabled it to survive, when others like Neuer Markt and Easdaq simply failed.
	The second feature is the strength and liquidity of the secondary market. Liquidity is an important subject. It is what makes the difference between being able to borrow money and not, and being able to borrow money at fine rates. Last year, 108 million shares were traded on AIM with a value of £42 billion; that is 80 per cent of AIM's total market cap turned over in a year. That growth in liquidity was driven by the expansion of institutional investor interests, not just private investors. Virtually all major international institutions are now prepared to invest in AIM stocks and they account for 41 per cent of the market by value.
	A third and rather more esoteric reason for AIM's success is the power of the technology that drives it and the introduction of SETSmm, the hybrid electronic order book which combines electronic trading with our established market maker system. It has been a proven success because it refines liquidity. It is quick and efficient and we rolled it out to the small capital market last year. It is an extremely important mechanism which no other European country has for channelling money into smaller companies and as such is of vital importance.
	Indeed, the London Stock Exchange is now engaged in discussions with investors, advisers and intermediaries to recreate in Europe the unique community that makes AIM so successful in London. Local nominated advisers across Europe, if the plans come right, will act as a pipeline for companies coming to AIM, and local member firms will provide liquidity, ongoing research and local distribution to investors. That should help to foster the entrepreneurial culture in Europe as well as here with all the benefits of economic growth and wealth creation that that brings.
	I would therefore like to say to the Minister that it is vital that the tax and regulatory environment in which AIM operates remains. AIM was carved out of some of the more potentially damaging effects of the prospectus directive introduced as part of the financial services action plan, and it is important that the Government continue their good work in ensuring that regulatory or tax changes do not damage the successful market. If they do, it is the small and medium-sized businesses on which so many of our hopes are set that will be the losers.

Lord Borrie: My Lords, my noble friend Lord Harrison began his speech by demonstrating how, through the creation of a successful macro-economy, small and medium-sized enterprises have been assisted immensely. He also pointed out that the Government can bear in mind the interests of small and medium-sized enterprises, and the interests of the public in the success of those enterprises, through the many ways in which the Government are able to influence the micro-economy. The Budget next week, for example, may help business by laying the foundations for what is called a new Hollywood, developing our national strength in fashion, design, media and communications.
	The reduction in red tape was bound to be a topic. I think that as soon as "small business" is mentioned Her Majesty's loyal Opposition immediately think of red tape. However, as my noble friend Lord Williams of Elvel, said, that is not a problem that has arisen only since 1997. But it is a vital issue, and the Government have worked hard on it, especially through the Better Regulation Task Force, and in new legislation, such as the Company Law Reform Bill, which our Minister on the Front Bench today is responsible for on a day-by-day-by-day—I do not know how many days—basis. That Bill allows private companies to do without the formalities of annual general meetings, making it easier for shareholder decisions to be taken by way of written resolution, and so on.
	The Government have commissioned a review, which has not been mentioned so far this afternoon, to assess the additional and unnecessary burdens placed on business by gold-plating EU-based laws. Mr Neil Davidson QC is seeking concrete examples to back up the long-standing gripes of SMEs about gold-plating. I do not use "gripes" to indicate complaints with no substantive backing to them. Here is an opportunity for the friends of the noble Lord, Lord MacGregor, in the Institute of Directors and elsewhere to make their points known to the inquiry. But much regulation, for health and safety in particular, for the well-being of employees and for consumer protection, is essential. As my noble friend Lord Harrison said, small businesses cannot be excused from that—they cannot say, "Because we are small, we don't have to comply".
	The noble Baroness, Lady Byford, referred to a hairdressing salon having certain difficulties. I have no doubt that if I knew the details I would be as sympathetic as she is. However, we do not have to go back so many years to find that hairdressing salons were among the most exploitative and abusive of women's rights in terms of their long hours and low pay—and as for getting maternity leave, you must be laughing. We should not forget history when we realise that there are regulations that need to be conformed to by small businesses.

Baroness Byford: My Lords, I was not in any way decrying the position, as obviously it is right to have that sort of regulation. All that I was trying to say was that it is increasingly an additional burden because of the length and complexity of regulations that are now in being.

Lord Borrie: My Lords, I am happy to hear the noble Baroness say that. I was going to say something that I think she will agree with—that today, with the regulations that we have, what is really important for small businesses is the ability to get advice on how to comply, and that enforcement should be proportionate and light-touch. The forthcoming Local Better Regulation Office will advise and help companies on compliance with regulation. Surely we can all agree that that is at least as important as inspection and enforcement and the heavy hand of regulation.
	I declare an interest as the vice-president of the Trading Standards Institute. Trading standards and environmental health laws are primarily for the benefit of the public. None the less, it is in the interests of all businesses to know that other businesses have to comply with these regulations, because that is vital to a competitive economy. Nothing will irritate small businesses more than to know that their rivals in the same lines of business are somehow getting away with non-compliance.
	I am currently the chairman of the Advertising Standards Authority. If advertisements mislead as to the price of goods or the price of services or in some other way, complaints from competitors are looked on at least as seriously as complaints from the general public. Sometimes complaints about advertisements from competitors are more knowledgeable, the competitors knowing more about technical detail and being able to back up their complaints and concerns with expertise. If these complaints turn out to be justified, the advertisements will be stopped and both the rivals and the public will benefit.
	Business complaints to the Advertising Standards Authority are merely an example of what I now wish to refer to, namely complaints to all sorts of regulatory bodies, including the Office of Fair Trading and the Financial Services Authority. They are all indications that business—including, most importantly from the point of view of my noble friend Lord Harrison, small business—can do a lot to help itself achieve its just deserts.
	I use the word "whistleblowing" now, because, although it is sometimes thought of as a sneaky thing to do—which is unjustified—I would say that whistleblowing, when in the public interest, is not the undesirable action of a sneak, but a justifiable process to enable regulatory bodies, paid for by the taxpayer, to do their job that much better for the public good. One recent example noble Lords—in particular the noble Baroness, Lady Miller of Hendon—will recall is the Enterprise Act 2002, which was guided through the House by the Minister. It gives official recognition to the merits of justifiable whistleblowing by providing an incentive to a member of a price-fixing cartel—probably one of the less important members—to "split" on his fellow members. The benefit will be a reduced penalty. It was an odd idea, borrowed from the United States, but, I think, a valuable one.
	There are many things small businesses can do to help themselves. Joining a reputable trade association is one. Trade associations are consulted by the Government on all sorts of matters. They can help a company with their collective and long-standing wisdom, providing advice on human resources problems, training facilities and legal advice. SMEs cannot have all these resources in-house like a big company; nor can they be expected to know all there is to know about their obligations to employees, consumers and suppliers. The payment of a trade association's subscription can be a very worthwhile investment. It is crazy for SMEs to imagine that they can entirely go it alone in this complex world and yet succeed. Sometimes small businesses are their own worst enemy, railing at the familiar scapegoats of the Government, local authorities and—as the noble Lord, Lord Dykes, will know—Brussels, without taking even the most obvious steps to help themselves acquire the skills they need to run albeit a small company, and to handle customers, employees, suppliers and, indeed, those men from the inspectorate of the regulatory body.

Lord Fyfe of Fairfield: My Lords, I congratulate my noble friend Lord Harrison on initiating this afternoon's debate. In his introduction the noble Lord demonstrated his very wide knowledge of business, not only in this country, but in Europe. I would like to focus, briefly, on retailing. I should declare something of an interest: I was chairman of the Co-operative Group (the CWS) and chief executive of the Midlands Co-operative Society. I do not claim to be an expert. I am always extremely suspicious of people who are described as experts, because they often masquerade as something they have not quite achieved. Nevertheless, I have operated superstores, supermarkets, convenience stores and other activities such as travel agencies and indeed funeral operations, though I will not regale your Lordships' House with my experience of the latter operation.
	In Britain we should be proud of our retail industry. It is innovative and imaginative. It has pioneered lots of activities and initiatives throughout the world. Indeed, it is widely respected and envied for that degree of expertise. It employs about 12.7 million people. It is the biggest employment sector in the land. It is highly successful and is copied throughout the world.
	However, that very success contains dangers. In an unregulated superstore environment that success can cause tremendous damage to rural communities and sentiments. I am concerned about the number of villages—indeed, small towns—that have almost been devastated in retailing terms by the impact of one or two supermarkets or out-of-town superstores—superstores being defined very simply as those with a selling space in excess of 25,000 square feet. That success also has its drawbacks because it impacts on local communities and on small local shops.
	I was at exactly the same function as the noble Baroness, Lady Byford, last week. We were entertained, and I suppose we had our ears twisted, by the Association of Convenience Stores. But I stress that they were not looking for something for nothing. They were not looking for handouts. They were simply looking for a fair deal for the future of their type of stores. They are vital to the local community. They are just as vital in a small community as a local church and—dare I say it—a pub, or a school. They are a meeting place. People congregate there to discuss local issues and the free and fair interaction of values and principles. So they are vital. And that degree of vitality spreads, because local businesses in turn divert a lot of their expenditure to other local businesses such as solicitors, tradesmen and other work people throughout that town or village. If a large superstore comes into operation it is clearly done centrally; it is not done in a small town or village. So other people within the community suffer from the lack of the facility.
	Having very briefly described that background, I turn to what can be done to help small businesses in a sensible and practical way. One thing that should be done is tighter guidelines from central government to local authorities on planning consents for out-of-town superstores. This has developed into a free-for-all in recent years and it is quite often a matter of what is politely called planning gain. It is less politely and perhaps more accurately called cheque-book planning. It often means that a superstore comes along and is invited by the local authority to develop a superstore with certain conditions: "Will you provide a new bypass? Will you provide a new community centre? Will you provide a new meeting place? Will you provide a doctor's surgery?" and so on. Often, the operator that offers the most attractive "planning gain" is the one favoured irrespective of demand in the community for the facility offered. We should do something somewhere about so-called planning gain or cheque-book planning.
	Sunday trading is another vital aspect of limiting the damage to small shops. There is much talk at the moment of deregulation, and Tesco, Asda and some of the DIY operators are, unsurprisingly, campaigning very strongly for deregulation. Superstores are currently restricted to six hours' trading on a Sunday. If deregulation comes in, I have no doubt that that will be 24 hours within a very short time. That can have a massive impact on small shops, which, it is anticipated, could lose more than 3 per cent of their turnover. That does not sound a lot on the face of it, but it can have a significant impact on turnover because retailers work to very narrow margins. Therefore, there is a very real danger.
	Another fatuous argument sometimes used to support the development of superstores is that they will create employment. We are all familiar with the banner headlines, "New store proposed—250 new jobs will be created". Frankly, that is absolute nonsense. Research indicates very clearly that 250 new jobs may well be created at that location, but 400 or 500 jobs may well be lost in other locations in the vicinity. So that is not at all a viable argument.
	Another aspect that I shall mention very briefly and which the Government should act on—I will be very interested to hear the Minister's response on this—is the predatory pricing policies that are often employed by the major superstore groups. Selling at less than cost price is commonplace, and prices revert to their normal level once the local small opposition has been vanquished. Even in the United States of America, there is, I believe, legislation to prevent that. It is interesting that the largest retailer in the world, Walmart, has 18 per cent of the US food market share, which is significant, against our largest food retailer, Tesco, which has an almost 30 per cent market share. So even the Americans realise that some legislation is necessary to curb predatory pricing and below-cost selling. I would be interested to know what the Minister has to say about that and about Sunday trading and more tightly regulated planning conditions.

Baroness Miller of Chilthorne Domer: My Lords, I thank the noble Lord, Lord Harrison, for introducing such an interesting debate that has attracted such a wonderful range of speakers. I have learnt something from every one of them. Before I make my contribution, I must declare an interest; I have finally been tempted back into retail after many years. At the end of this month, I am opening a small—and evidently doomed, to judge by the figures—shop selling local food. So I have been listening to contributions this afternoon with great trepidation. However, I live in hope that the market is about to recognise the value of small retailers generally. I was very heartened last week by the OFT's albeit interim decision to refer the grocery market to the Competition Commission. I would certainly urge it to follow up the decision, and I might return to that in detail if I have time at the end of my contribution.
	The noble Lord, Lord Harrison, referred first of all to Business Link, and I must say from my recent experience with a new start-up that the Business Link website is fantastically helpful.
	I concur with the point made by the noble Lord, Lord Borrie, that one should join a reputable association such as the Federation of Small Businesses. I again give an example from my recent experience. These days, any small business needs a chip and PIN machine so that, we hope, it can take amounts of more than £10, but the percentage charged by the companies on every sale is really quite large. However, should you belong to the Federation of Small Businesses, the percentage drops dramatically and the saving will pay for your subscription to the federation in absolutely no time at all. So that is the kind of real help that belonging to an association can give.
	The noble Baroness, Lady Byford, referred to the CBI's wish for a one-stop shop for grants and support schemes. I think there needs to be a one-stop shop for small businesses that couples together both the grants and support schemes and the regulatory issues. While, as I have said, the Business Link website offers a great deal, it depends on the fact that you already have a computer and that you already have broadband. I was very interested in the opinion of the noble Lord, Lord Williams of Elvel, that not all of Wales is covered by broadband. When I raised this issue in your Lordships' House in the debate on the rural economy, I stated that there were still gaps in broadband coverage. The Minister for Defra, the noble Lord, Lord Bach, came back on this and said that 99 per cent of rural areas were covered by broadband. It may be a difference in the definition. I am sure the Minister will be able to tell me the definition of "broadband" and whether the Government are counting in ADSL lines, which are substantially slower.
	Given his long experience of this issue over time, the contribution of the noble Lord, Lord MacGregor of Pulham Market, was very thought-provoking. Since he made his contribution, I have been dwelling on the point he made about us now living in a globalised economy and the consumer benefits of that. But the theme that has come through today is that we are at once a country of both consumers—when we benefit from the market—and of people who depend on being employed by that sector. People wear twin hats: they are consumers at one moment but, if the small and medium-sized business market suffers particularly, they become out-of-work consumers, which really does not help them at all. The relationship is very fragile and should be borne in mind. When we are looking at issues such as what is good for the consumer—which the OFT will be considering—we should take into account that we are not simply consumers but employees as well, as are our relations and so on.
	As I expected, of course, European regulations were raised. I absolutely agree with the noble Lord, Lord Borrie, that we need regulations. I was therefore surprised by the contribution of the noble Lord, Lord Vinson, when he intervened on my noble friend Lord Dykes and seemed to imply that if we did not have Europe we would not have any regulations.

Lord Vinson: My Lords, it is not that I was against regulation per se; I was against disproportionate and excessive regulation, much of which, in the eyes of commonsense, does not appear appropriate. That is what is pouring out of Europe and that is where the objection comes. It is deeply felt by small firms on the receiving end.

Baroness Miller of Chilthorne Domer: Fortunately, my Lords, I have to hand an example of why that is not the case. Europe is doing something about waste reduction, pollution and many of the serious issues on the environmental agenda. If Europe addresses those issues, it often allows a national government to pursue things it might have found politically difficult at home in the first instance. However, how the national government implement those regulations is critical.
	I draw the Minister's attention to one regulation which is causing an awful lot of trouble for small businesses. I refer to the Waste Electrical and Electronic Equipment directive, which is causing trouble because of the Government's delay. Some 50,000 small businesses will be affected by this directive, but UK implementation has been delayed four times. The Environmental Industries Commission cites the DTI reasoning of continuing concerns from business, but in fact none of its members has apparently been consulted. The real concern of small business is not that nothing should be done about waste electrical goods—it is about the uncertainty of how to make investment decisions in such an unsure regulatory situation. The Government really must make these decisions more quickly. When a directive comes in, they need to give the business sector some certainty.
	With regard to the decision of the Office of Fair Trading to refer the supermarket and grocery sector to the Competition Commission, I agreed with the concerns expressed by the noble Lord, Lord Fyfe of Fairfield, about supermarkets and planning gain—what are commonly known as 106 agreements. The larger supermarket can offer a community all sorts of gains such as a new roundabout or the solution to highway issues. That makes it much cheaper for the local authority in the short term because the supermarket can pay for all those things. But if the cost in the long term is either what the New Economics Foundation aptly called "clone town Britain" or, even worse, a very dead high street because all the business has gone to the out-of-town superstore, it is not planning gain but planning loss. It just looked like gain in the very short term.
	The entry of supermarkets into the local format is particularly concerning. I do not need to rehearse that because we have debated it in your Lordships' House previously. But it concerns me that a supermarket chain can have a supermarket in one town and then take over the convenience store, particularly in a small market town where anything else is a bus ride away. There is now a four-week consultation period; should the decision be supported, I believe the Competition Commission is likely to investigate this for up to two years. Is there any chance that that could be done slightly more quickly? As we have heard, we are losing 2,000 shops a year. That is serious, and the longer this situation continues, the worse it will get.
	It is a mark of the times that there is a very entertaining television programme based on whether people are truly entrepreneurial and have backed up their entrepreneurial ideas with facts. I refer, of course, to "Dragons' Den". I do not think that even five years ago we would have seen that as a television programme to capture the imagination. It has, and I regard that as a sign of optimism.

Baroness Miller of Hendon: My Lords, I begin by declaring three small peripheral interests. First, I am a founder member of the Small Business Bureau, a pressure group that campaigns on behalf of small businesses. Secondly, I am a director of and shareholder in a group of family property companies, many of whose investments consist of properties let to small—sometimes very small—companies. As such, I am well aware of the problems that some of our tenants have which, in turn, impinge on the rents as well as the wages that they can afford to pay. Thirdly, I started and ran my own business, which I sold out in 1990.
	Like other noble Lords, I want to thank the noble Lord, Lord Harrison, most sincerely for having introduced this debate, for having spoken so excellently and, as a result, for having had so many wonderful contributions from all around the House. They have been so numerous that I hope your Lordships will forgive me if I do not mention them all.
	We have had several debates on small businesses in recent years. Concerns about them are raised in the course of discussions on other subjects; for example, the Company Law Reform Bill which is progressing through the House. The noble Lord, Lord Harrison, rightly called attention from the government Back Benches to the assistance given by the Government to small and medium-sized businesses. I would certainly not wish to decry or diminish any of the efforts that the Government are making.
	No one who has listened to our various debates and discussions, or who has read the stream of articles in the financial press, can be unaware of the almost immeasurable importance of SMEs to the economy and employment. Noble Lords who are sufficiently interested in the subject to have been here today know the statistics very well. I shall not repeat them, because I want to use my time to say other things.
	I mention, however, the plight of small shops, which form a large part of the small business sector. I shall not mention post offices, because my noble friend Lady Byford did that so well. The recent report of the All-Party Parliamentary Small Shops Group of the other place makes a gloomy assessment of the prospects for the traditional high street. I wish my namesake, the noble Baroness, Lady Miller, very well in hers. She should gloss over those sorts of fears, because I am sure that she will do very well.
	It is not the Government's fault if customers choose to vote with their feet in favour of cheapness and economy, but, as the noble Lord, Lord Fyfe of Fairfield, said, the effects can be devastating for communities. The Government have some influence, however, over the granting of planning consents for new, giant out-of-town shopping centres. I hope that they listened carefully to what the noble Lord said about that. They have influence also over the savage parking restrictions which prevent local shopping in favour of the out-of-town centres with unlimited parking spaces.
	The Competition Commission, of which I used to be a member, is commencing a new investigation that is limited to supermarkets, but the Government need to look at the wider implication of the possibility, forecast by the other place, of some high streets becoming deserts, occupied only by hairdressers, building societies and charity shops. Again, I shall not rehearse what the noble Baroness, Lady Byford, or the noble Lord, Lord Fyfe, said.
	Despite the Government's concerns and efforts, all of which I fully acknowledge, there are still some large policy and practical shortcomings which it is essential that both the Government and the EU try to put right. The current definition of a small business is a business which has a turnover of less than £2.8 million, a balance-sheet value of under £1.4 million and not more than 50 employees. The European Commission, for its own purposes, adopts wider financial parameters. However, as I have often said in debates such as this, the vast majority of small businesses do not have 50 employees. Ninety-seven per cent of small businesses in the United Kingdom employ fewer than 20 people. Nevertheless, they produce more than 58 per cent of its employment, as my noble friend Lord MacGregor pointed out.
	The small business that I founded and ran for 19 years employed fewer than 20 people. Many businesses employ only four or five people, often comprising mostly of family members whose living is the small business, whether it is the ubiquitous corner shop, the newsagent, the hairdresser or the dry cleaner. The Federation of Small Businesses is lobbying the European Commission to adopt a definition which contains three graduations, including very small businesses. Those graduations are: up to five employees; from five to 20 employees; and 20 and upwards. I would be interested to hear from the Minister whether the Government have any views on that kind of proposal.
	As I have frequently argued—I am glad to see that is gradually being recognised—what is appropriate for a major industrial business is not necessarily suitable for a small engineering firm. What is right for the big four supermarkets is sometimes entirely wrong for the local convenience store. The noble Lord, Lord Harrison, will know only too well from his experience as a former MEP about the torrent of complicated, lengthy and over-prescriptive directives that pour out of Brussels. I am not talking about the health and safety regulations which the noble Lord, Lord Borrie, mentioned, and which all businesses, whether small or large, need to implement. One size emphatically does not fit all. It does not even fit all those which are currently lumped together as small businesses. Over 99 per cent of United Kingdom businesses are classified as small and are responsible for almost 47 per cent of non-government employment.
	I shall not comment on the increase in regulations because my noble friend gave the numbers clearly. The noble Lord, Lord Borrie, cited the noble Lord, Lord Williams of Elvel. It is not true that there were as many in the past as now. In 2001, regulations cost business £10 billion. They have now increased more than five times. As my noble friend said, 15 new business regulations come into effect every single day. I wish to counteract the idea that it was always so. It is an increase of 52 per cent since 1997. As Bill Midgley, President of the British Chambers of Commerce, said,
	"The big issue as the Budget approaches is to reduce the burdens on business in an increasingly competitive global economy".
	As my noble friend mentioned, that is where we are competing today.
	In 1997, the Labour Party manifesto promised to cut unnecessary red tape. The Government told my honourable friend the Member for Rutland and Melton that only 27 regulations had been amended or reformed under the Regulatory Reform Act 2001 while, during that same five years, 17,800 new regulations were introduced. That is worth thinking about.
	It follows from the figures I have quoted as regards the numbers of small businesses in relation to the size of the economy that a vast proportion of that regulatory expense falls on SMEs, including small and very small businesses which are those least able to afford it. The social aspects of the recent employment legislation, as well as the Work and Families Bill we are currently discussing in this House, impinge most heavily on small business and very small businesses which are least able to cover staff taking parental and adoption leave, time off for family emergencies and so on. We support those changes. But can the Minister comment on how that burden could be eased for small businesses? I shall be glad to hear his response. Only yesterday a colleague showed me a form regarding the national statistics—the monthly inquiry into the production industries. The form requires information under nine different headings. To work out the figures for the ninth heading of the Annual Business Enquiry, Part 2—it was dealing only with the numbers employed in different areas—took more than a day. That is a very difficult task for a small business.
	I refer now to the organisations set up by the Government with the objective of assisting small businesses: the Small Business Service; Business Link; the Small Business Council; the Ethnic Minority Business Forum; the Small Business Task Force; the Capital for Enterprise Board; the Finance & Investment Board, and so on. Those are no doubt worthy bodies. However, the CBI said recently that although there are 2,650 different grants and schemes on offer in England alone, they are often "confusing and inconsistent". One of the problems is not knowing where to go for information.
	I conclude by saying that although some of my remarks may appear critical—I hope that the Minister will think them only slightly critical—I do not doubt the Government's good intentions about what has often been called the engine of the United Kingdom economy. All noble Lords and I wish to do is to spur them on to further efforts on behalf of SMEs, especially very small businesses, and to reduce the burdens they have to bear.

Lord Sainsbury of Turville: My Lords, I am delighted to be taking part in this debate today. It has been extremely interesting, and I thank the noble Lord, Lord Harrison, for initiating it, and for speaking so eloquently on behalf of small businesses.
	Small and medium businesses, as the noble Baroness, Lady Miller, said, are the engine-room of the UK economy, and invariably face the biggest hurdles when trying to grow. The Government recognise this fact and are determined to provide the best possible conditions for them to be able to innovate and grow. It is a remarkable fact that 99.9 per cent of all UK businesses are small or medium sized. There are in fact only 6,000 businesses in this country that employ more than 250 people.
	Small businesses account for more than half of all private sector employment—that is, over 12.6 million people. I say to my noble friend Lord Williams that if we were to triple that, we would be doing extremely well. Indeed, almost the entire population would be working for small businesses. They account for over 50 per cent of new jobs in existing companies, and 85 per cent of new jobs in new businesses. I agree with both the noble Lord, Lord MacGregor, and my noble friend Lord Cobbold that small business is key to our economic success. It is also true, as the noble Baroness, Lady Miller of Chilthorne Domer, said, that things like "Dragons' Den" suggest that there is a change of culture in this country, and that being an entrepreneur is becoming something young people in particular aspire to.
	As I address the points raised in this debate, it would be useful to remember the progress the Government have made on the economy as a whole and on small and medium-sized businesses in particular. I agree with the noble Lord, Lord Harrison, that the Government have focused on conditions for small business, and have been good to SMEs. Above all—this is enormously important for small businesses, in my experience, and one cannot say it enough—we have created and maintained a stable macro-economic environment for the past eight years. For small businesses, that is one of the most important things one can do.
	There is no doubt that SMEs are in good shape at the moment. We have a record number of businesses, around 4.3 million, over 600,000 more businesses than in 1997 and almost double the number a generation ago. The business startup rate is 1,500 per working day. Business failures are low too, the lowest since records began in 1993; 92 per cent of UK businesses registering for VAT in 2003 were still registered a year later; and SME productivity growth is higher than that of all firms over the 1999–2003 period.
	We have also made life easier for business. We have cut corporation tax, simplified VAT registration and set the highest VAT threshold in Europe. Back in 1997 budding entrepreneurs faced a pile of paperwork and a long wait to begin trading. Today you can register your company electronically and be up and running in just one working day. My noble friend Lord Cobbold quoted from an EU report about halving the time it takes to set up a business. The fact that we are doing it in one day is probably a satisfactory target to have reached.
	In 1997 enterprise was not sufficiently rewarded. Many investors in new entrepreneurial business faced a 40 per cent tax rate on gains they made in risky long-term ventures. Today, if business assets have been held for two whole years or more, only 25 per cent of the gain is charged to tax, giving an effective rate of 10 per cent rather than 40 per cent. The Government have also encouraged go-ahead businessmen and women to take risks with the Enterprise Act 2002, not least by reforming insolvency law to remove much of the stigma associated with honest business failure.
	We have made it easier for business to access finance. We have provided a government-backed guarantee of 75 per cent on loans to small businesses. In 2005 the Small Firms Loan Guarantee supported over 7,000 business loans, underpinning more than £400 million of bank lending. We set up nine regional venture capital funds, which have invested almost £42 million in 134 companies; and we have launched the Early Growth Fund, with 34 small businesses benefiting from around £500 million. We have also sought to increase the opportunities for all, which is why the Government support the "Make Your Mark" campaign and its annual enterprise week.
	A total of 408,000 people attended the 2,215 enterprise week events held across the country last November. Those events were organised by more than 700 organisations, with the support of more than 3,800 businesses, which highlights the high value industry places on this initiative. We have rationalised the range of Department of Trade and Industry business support products from more than 180 to nine. I still believe that there are too many schemes, however, and that rationalisation has a long way to go to narrow those down and make them more focused.
	Small and medium-sized business can also access a range of business support from Business Link, which provides an excellent service. More than 670,000 businesses now use Business Link every year. It is dedicated to helping businesses innovate, improve, grow and become competitive, and the award-winning Business Link website provides authoritative information from over 40 government departments and agencies.
	However, we can and still need to do more. I believe that there are many potential entrepreneurs among women, minority ethnic groups and young people, whose energy and enterprise we need to unleash. Let me give two or three statistics that show what opportunities exist to create more entrepreneurs in this country.
	If women started businesses at the same rate as men, we would have 150,000 extra start-ups each year in the UK. That is why we are setting up a new task force on women's enterprise, to advise the Government on further action. If under-represented minority ethnic groups had the same self-employment rate as other groups, there would be more than 70,000 extra self-employed people—a 67 per cent increase in self-employment in under-represented groups. That is one of the reasons why we set up the Phoenix fund in 2003 and recently announced £250 million of funding for enterprise in disadvantaged areas under the local enterprise growth initiative.
	If young people aged 20 to 29 had the same self-employment rate as people aged 30 to 39, the number of young self-employed people would double. That is why we have worked to put enterprise firmly within the school curriculum, making £60 million available each year to provide five days' enterprise activity for all students between the ages of 14 and 16. If young graduates had the same self-employment rates as other young people aged 20 to 29, there would be 30,000 more young, self-employed graduates—50 per cent more. That is why we have set up the National Council for Graduate Entrepreneurship. So far, over 2,800 university students have attended the flying start rally to turn their business ambitions into reality.
	Noble Lords will appreciate that several of the matters raised during today's debate, particularly those raised by the noble Lords, Lord Harrison and Lord MacGregor, will be considered by the Chancellor in the light of the forthcoming Budget next Wednesday. I have noted that the Federation of Small Businesses and the Forum for Private Business have specifically raised issues to do with corporation tax rates, the VAT zero rate trading scheme, VAT on hot takeaway food, the offshore Channel Islands VAT issue, national insurance and the national minimum wage. Noble Lords are right to raise these as matters of importance to small businesses, but they will recognise that these issues now rest with the Chancellor, and we must await the outcome of his deliberations. I am sure that he has considered carefully the representations by the Federation of Small Businesses and the Forum for Private Business.
	On these occasions, the subject of regulations is always the biggest issue. I must deal with what I think are a number of mistaken ideas. The issue of regulations is huge, and one that we need to tackle, but we should have two points in mind. The first is that no country has dealt with this issue significantly better than we have. People always point to America. I have done business in America, and I can tell the House that given a choice between regulations in this country and dealing with the legal system and lawyers in America, I would pick regulations in this country every time.
	My second point is that we must base our calculations of the regulatory burden and its costs on sensible figures. When people talk about the level of regulations and the fact that there are 15 new regulations a day, they are referring to the number of statutory instruments. Ninety per cent of those statutory instruments have no impact on businesses at all. In fact, in 2004, 48 per cent of all statutory instruments related to temporary road repairs—that may be a commentary on our society but it is not a burden on small businesses. We should get away from the idea that statutory instruments are any kind of measure of the burden on business. Many other SIs related to issues such as preventing money laundering, disease control, free school meals and combating late payments, all of which are highly desirable goals.
	The noble Lord, Lord MacGregor, raised in favourable terms the situation in China and India. I do not think that we should seek to emulate in this country the environment, the environmental controls or the factory conditions in China. It seems to me that conditions in China are like those that existed in Victorian England, and that is why it was necessary to have social and environmental controls. The situation in China can be tolerated when one's living conditions are dictated by wages just above the starvation level, but they are not conditions that we in the developed world would tolerate.
	I make a final point on regulations to the noble Lord, Lord Vinson. Many of these regulations come across my desk and they are in fact European regulations which replace national regulations. To that extent, although there is a burden on business in learning the new regulations, they are part of opening up the internal market and enabling businesses—particularly small businesses—to trade across the whole of Europe with consistent standards. That makes it easier for businesses to trade in Europe. So, again, we should be careful about saying that any European regulation is an additional burden; in some cases, it is a rationalisation and, although there may be temporary problems in adapting to it, it gives businesses the opportunity to trade freely across Europe.
	As I said, we regard regulations as a major problem and we are tackling that. We have stripped away regulatory burdens on businesses wherever possible. We have exempted nearly 900,000 companies from audit requirements on their accounts as a result of raising the annual turnover threshold from £1 million to £5.6 million, and that has saved companies £94 million a year. As has been said, we have provided the highest VAT threshold in Europe. Since 1 April 2004, firms with turnovers of £60,000 or less have not had to register or pay for VAT, and we have reduced the payroll burdens on 1.2 million businesses by paying working tax credit directly to individuals rather than via employers.
	We have made a whole series of changes to employment regulations—the minimum wage, the right not to work more than 48 hours a week and four weeks' paid leave and so on. The figure quoted as the cost of the burdens to industry is £50 billion, but, again, we must be clear about what that figure includes. The administrative burden accounts for a tiny proportion of it. The main part of it is the cost of giving those benefits to people. If people want to attack that figure, it is not enough to say, "Get rid of the burdens"; they have to say, "We want to go back on all those proposals". They have to say, "We don't want a minimum wage, we don't want the right not to work more than 48 hours a week and we don't want people to have four weeks' paid leave", because that is what the £50 billion relates to. In fact, the cost to employers is around 1 per cent of the annual wages and salaries bill for the economy as a whole, or around £4 per employee per week. There is no evidence that regulations are damaging the performance of the economy—in fact, the UK regulatory burden compares well internationally.
	I turn to the question of access to finance. As has already been said, the Milken Institute said that Britain was the best place in the world for entrepreneurs to raise capital, while the World Bank has named the UK as among the best places in the world in which to start and grow a business. I have given some examples of how we have improved that situation. I agree with the noble Baroness, Lady Cohen, on the importance of the AIM market, which is one of the most significant changes for small business in recent years. It is important for two reasons, being not only about the ability of businesses to raise finance but enormously important in providing an exit route for venture capitalists and business angels. It is only when that exit route exists that people will consider investing in the earliest stages of businesses.
	The Government are also delighted that the AIM market is trying to become a truly pan-European stock market for hi-tech businesses. If it can become the European equivalent of NASDAQ, that will transform the position of fast-growth, hi-tech businesses since it will enormously increase the liquidity of the European market for such ventures, which is the advantage held up until now by the United States. I assure the noble Baroness that the Government will do nothing to hinder the growth of that market. If, as I suspect, the best thing that we can do to help is to stay out of the whole thing, we will do that.
	The noble Lord, Lord Cobbold, raised the question of knowledge transfer from universities. That is one of the great success stories of recent years. We have had a series of schemes—the University Challenge competition, the Science Enterprise centres and the HEIF programme—which have transformed the scene for university spin-outs. To give just one figure, in the last two years, 20 businesses which were university spin-outs were floated on the stock market. The market value of those companies today is £1 billion, so the old story that British universities were no good at spin-offs is no longer true.
	The question of young people was raised by the noble Lords, Lord Harrison and Lord MacGregor. We have provided £60 million per year to support a new focus on enterprise education for all key stage 4 pupils. That includes the equivalent of five days enterprise activity, such as running a realistic business, which builds on existing work-related activities such as work experience.
	Several noble Lords raised the question of supermarkets—one of the few subjects which I talk on in your Lordship's House which I know something about. It would not be appropriate for me to comment on such issues as predatory pricing, Sunday trading or Section 106 agreements, where the House might not believe me. I will get one of my colleagues at the DTI to write to noble Lords on those issues. On the Euro Info Centres network, the Commission is currently reviewing the business support services that it offers to SMEs. Meanwhile I can tell the noble Baroness, Lady Howells, who raised the issue of black and ethnic minorities that we have started to do some work in that area. In December 2004 the Chancellor asked the National Employment Panel what could be done to increase employment and business growth among ethnic and minority groups.
	I have not dealt with all the issues but on any key ones I shall write to noble Lords. In conclusion, we have done a great deal in recent years. There is still more to do, and I have given some indication of the opportunities that exist. The Government are determined to go on helping small business and create the best possible conditions for those small businesses to innovate and grow.

Lord Harrison: My Lords, in concluding this debate I make three quick points. First, I shall dispute tongue-in-cheek with the noble Baroness, Lady Byford. She said that small businesses are not small beer, but my wife and I enjoy a pub lunch every weekend in Cheshire, the Wirral or north Wales where I usually partake of a small beer. But what interests me is the number of small breweries that are growing; they reflect what we want small businesses to do—to diversify and provide the service that some of the slower giants feel unable to provide in the way that we want.
	Secondly, I take up the theme offered by the noble Baronesses, Lady Miller of Hendon and Lady Miller of Chilthorne Domer. This has indeed been an excellent debate and one which has provided food for thought for all of us concerned with small businesses and conducted with absolutely the right spirit. I also thank the noble Lord, Lord Sainsbury, for participating today. As the noble Lord, Lord Borrie, noted, he has been consumed with the Company Law Reform Bill. I know that he has had some difficulty in finding time to take part in this debate and offer us his views and thoughts.
	My third point entirely excludes the noble Lord, Lord Sainsbury. With respect to noble Lords today who have shown great knowledge and understanding of small businesses, there is one reform that we can perform in this House to help small businesses. We must increase the number of us who have deep experience of small businesses. I have no objection to people coming to this House who have made pots of money, but I would like to see a few more who have made pots or pans or things that reflect the lifestyle small businesses that make up the vast majority of small businesses in this country. I hope that that is taken on board in the future.
	Once again, I am thrilled to have participated in the debate and thank all noble Lords and the Minister for so participating. With that, I beg leave to withdraw the Motion for Papers, although I hope some day to receive those Papers that we are always promised.

Motion for Papers, by leave, withdrawn.

Family Proceedings Fees (Amendment No. 2) Order 2005 Magistrates' Courts FeesOrder 2005

Lord Goodhart: rose to move to resolve, That this House regrets the Government's decision to restrict access to justice through the Family Proceedings Fees (Amendment No. 2) Order 2005 (S.I. 2005/3443) and the Magistrates' Courts Fees Order 2005 (S.I. 2005/3444), laid before this House on 20 December 2005.

Lord Goodhart: My Lords, the orders that we are discussing as a result of this Motion are a significant part of a major threat to access to justice. There have been constant increases in court fees, way beyond the rate of inflation. These increases are driven by the insistence that the costs of courts should be borne entirely by litigants. That is a relatively new concept. Until 1982, the costs of court buildings were borne by the state out of public funds: the litigants paid only the costs of the court administration. In 1982, the costs of buildings were transferred to court fees and therefore to litigants. Those costs included the cost of maintaining heritage buildings such as the Royal Courts of Justice and should surely be borne out of heritage funds so far as they are increased by the heritage status of the buildings. Of course, the Royal Courts of Justice, which are particularly fine examples of Victorian architecture, are by no means the only historic buildings occupied by courts.
	In 1992, for the first time, the costs of judicial salaries and pensions were also transferred to court fees. The result is that court fees are now so high that they constitute a real bar to access to justice. It is not a bar for the very poorest. Those who get legal aid have their court fees paid out of the legal aid budget. There are indeed limited provisions for fee exemption or remission, but those exemptions or remissions are limited to those who have passported rights and are in receipt of means-tested benefits. It is therefore almost impossible for anyone who is in regular work to qualify for legal aid or for exemption or remission from court fees. I believe that the result is that the fees now form a real deterrent for those who are on below-average incomes or, indeed, on average incomes or somewhat above them.
	I agree with the Civil Justice Council that there is a need to recognise that an effective civil justice system confers benefits on the country as a whole, not just on successful litigants, and that fees should be calculated accordingly. There is a need to review the entire system. The Civil Justice Council, a public body which the Lord Chancellor has a statutory duty to consult on fee changes, said in response to the recent increase that it was concerned that the persistent increases in fees were leading to a situation where certain groups in the population might no longer be able to afford to undertake litigation, and that the current exemption and remission scheme was not sufficient to guarantee access to justice.
	This Motion, however, concentrates on two specific examples of excessive increases in fees: the Family Proceedings Fees (Amendment No. 2) Order 2005 and the Magistrates' Courts Fees Order 2005. Both came into force on 10 January this year.
	Under the family proceedings order, fees for filing originating proceedings have gone up from £130 to £200. Fees for presenting a divorce petition, which until January 2005 were £180, increased last year to £210, and, as a result of the new order, have gone up to £300. Amending a petition has gone up from £50 to £80.
	The Children Act 1989 involves an enormous number of proceedings of the greatest importance to children and families, such as contact, parental responsibility, guardianship and financial provision for children. For most of these proceedings, the fees have gone up from £120 to £175. Until January last year, the fees were only £90.
	All these have, therefore, increased by approximately 50 per cent, as a result of the latest fees increase, and have nearly doubled over a year. This is an enormous increase for those without money to spare, particularly when we take into account that divorces and disputes over children are extremely traumatic and lead to an increase in ordinary living costs as a result of people having to set up separate households. These increases in fees will also have an adverse effect on local government, which often institutes proceedings under these Acts. That will increase the financial burden on local authorities and, through them, on council tax payers. The increase in fees will also reduce the amount of money available for legal aid, since the severely restricted Legal Aid Fund will now have to bear more in the way of court fees of legally aided parties. If fees increase, there is less money for other payments out of the strictly cash-limited Legal Aid Fund.
	The increases in the fees for civil proceedings in the magistrates' courts are even more spectacular. The fee for an application for an order for financial revision under the Domestic Proceedings Act 1978 has gone up in one step from £30 to £175. The fees for proceedings in magistrates' courts under the Children Act 1989—I have already indicated that these applications are of great importance to families—have gone up from £30 to £175, from £50 to £150, or from £20 to £150, for different types of application. An application for a liability order under the Child Support Act 1991 is undoubtedly the winner in this unpleasant race, because the fee has gone up from 70p to £40—increasing nearly 60 times over. Other applications under the Child Support Act have risen from £30 to £130, from £10 to £80 and from £10 to £90. In many cases the increases are nearly 500 per cent and in some cases they are 700 or 800 per cent, even if we ignore the remarkable increase from 70p to £40.
	Those costs are very frequently paid by vulnerable people going through the trauma of fights over the future of their children. I believe that those increases are nothing less than shameful. They cause hardship to those who have to pay them and they cause even greater hardship to those who cannot afford to pay them and are, therefore, unable to obtain remedies from the courts.
	I was tempted to put down prayers against the order and move them to a vote. I refrained from doing so only because of the long-established principle that your Lordships' House does not intervene in how the Government raise their money. However, I felt it was essential to have this debate on the record, which is why I tabled this Motion. In this country we used to pride ourselves on our legal system and in particular on our legal aid system. Legal aid was one of the great achievements of the Labour government of 1945 to 1951. It was implemented fully by the successor Conservative governments. However, the present Government have done grave damage to legal aid and are now seemingly bent on making access to justice even harder. What is the point of having good laws and fine judges if people cannot afford to access them? I beg to move.
	Moved to resolve, That this House regrets the Government's decision to restrict access to justice through the Family Proceedings Fees (Amendment No. 2) Order 2005 (S.I. 2005/3443) and the Magistrates' Courts Fees Order 2005 (S.I. 2005/3444), laid before this House on 20 December 2005.—(Lord Goodhart.)

Baroness Morris of Bolton: My Lords, I am most grateful to the noble Lord, Lord Goodhart, for this opportunity to express concern about the effect of these orders. First, I share the noble Lord's concern about the effect that the massive increase in court fees will have on low-income families who seek redress through the family courts.
	As has already been pointed out, under the new fee system, parents who try to secure a contact order with their child must now pay a court fee of £175, which is a huge rise from £30. Such parents may return to the court time and time again. In the consultation paper, which was published last September, the Government said that, of course, many applicants would not be required to pay the fees because they would qualify for legal aid or fee exemption or be granted remission. But the eligibility requirements for public funding of such cases are set at such a level that only those applicants with a very low income would benefit. That would not cover the majority of people on low and middle incomes.
	Contact orders are not the only remedy that will be affected by these fee increases. As we have heard, a fee for a divorce petition will now be as much as £300, a substantial increase from £210. Costs of applications for residence and parental responsibility orders have also increased. It is hard to see how that can be in the interest of family justice. It is also hard to see how that can be consistent with government policy to support parents to have contact with their children where it is safe to do so.
	I am also concerned about the impact that these fee increases will have on the Legal Aid Fund. The Law Society has pointed out that much of the estimated additional income generated by these fee increases would fall on the Legal Aid Fund. Under their impact assessment, the Government estimated that approximately £800,000 of the proposed increases will fall on legal aid, mainly in the public and private law family work. Can the Minister confirm that the Government still stand by that estimate, and what guarantee can he give that these increases will not greatly exceed the impact assessment already given?
	The legal aid budget is already under massive pressure. It is deeply concerning that these fee increases will only add to that pressure. The difficulties that local authorities face in relation to cases involving children are widely recognised. Fees under Part 4 of the Children Act fall, for the most part, on local authorities, which are responsible for issuing care proceedings. Again, the Government's impact assessment says that the increase in fees in public law childcare cases is worth an extra £1.4 million per year, spread across 199 local authorities. Will the Minister confirm that estimate? Will he guarantee that those fee increases will not affect the ability of local authorities to provide services for vulnerable children, who are most in need of protection?
	I recognise that it is in the public interest that our Court Service is well resourced and that the litigant should shoulder some of the cost of using the service. But it is important that all efficiency-saving options have been explored fully in relation to the Court Service rather than having immediate recourse to full cost recovery from those who use it. Will the Minister explain what other efficiency-saving measures have been considered; and does he consider that recourse to making the litigant pay more to cover the costs of the Court Service should be a last resort?

Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, Lord Goodhart, for the way in which he raised the debate and generally for his constructive approach, although clearly he disagrees with the way in which the policy is developing. Fees and their history have long been important matters of debate but the issue is not new. As the noble Lord will know better than most, fees have always been charged to litigants in civil cases. They were originally paid to the judges of courts who retained them personally. When major reform of public administration took place in the 19th century, including changes to the courts system, its modern form and the introduction of judicial salaries were made. Fee-setting powers were passed to the Lord Chancellor. The county courts, which were established in 1847, were entirely self-financing. Court fees were paid for judges, clerks, bailiffs and accommodation. The original clerks became the registrars and now the district judges.
	Later in that century it was accepted that fees should cover the remuneration of clerks and bailiffs but that salaries for judges, buildings and ancillary expenses should be met by the taxpayer. That is the origin of policy. In the 20th century much thought was given to the balance of payment for court services between fees and direct subventions from the taxpayer. Interestingly, the Macnaghten report on the Supreme Court in 1922 considered it an authoritative principle that the salaries and pensions of judges should be paid by the state and the rest through fees.
	In 1982 the Public Accounts Committee questioned what was then described as the limited cost approach adopted by the Lord Chancellor's Department. The then Lord Chancellor and the Chief Secretary to the Treasury carried out a joint review and reached agreement that the full cost of civil court services, excluding judicial costs, should be recovered from fees in future. In 1992 the Lord Chancellor and Chief Secretary agreed to change the policy to one of generally basing fees on the full cost, including judicial costs, while recognising areas of agreed social subsidy, mainly for family proceedings. The fees order in 1996 sought to remove the exemption for recipients of income support and was to that extent quashed. The consistent policy of the current Government, however, has been generally to set fees on the basis of full cost while ensuring the protection of access to justice for those of modest means through the system of exemptions and remissions.
	I give that history and background simply because I want the House to understand the options for the funding of the civil court system and to bring some realism to the matter. Essentially there are three ways in which we can fund our modern civil court system: first, to maintain the concept of setting fees to reflect costs, so that those who have sufficient means pay the full cost of litigation while the taxpayer's contribution is focused on those qualifying for remission or exemption; secondly, to subsidise the level of court fees generally by increasing taxes or taking money—from, say, the legal aid budget—in order to reduce court fees. A wholly free service would cost £400 million. Thirdly, we could cut costs and therefore fees by slashing court services, closing courts and sacking staff—not a strategy that your Lordships' House would greatly admire. Those who oppose these fees orders or say they object in principle to the Government's policy on fees, should state which of these other options they prefer.
	Court fees have to comply with the general policy principles that apply to all services for which the Government charge fees authorised by Parliament. The most important is that fees should not exceed the total cost of providing the service. Fees cannot be set to make a profit. All fee-charging services must have a financial objective agreed with the Treasury. For civil court fees, the objective is to recover the total cost, not counting the cost of providing fee exemptions and remissions. In other words, although the term is often used, the target is not "full-cost recovery". A better way of describing the policy is "full-cost pricing".
	Fees should generally be set at levels which, on average, if charged in every case rather than waived, would recover the full cost of providing the service. Full-cost pricing, together with a system of exemptions and remissions to protect the least well-off, is the better way of targeting the taxpayer's contribution at where it is most needed. Furthermore, many fees in family proceedings are currently set at levels well below full-cost. These include, in particular, the fees for domestic violence, adoption and public law childcare cases. None of these is affected by the amended fees orders, except when the magistrates' courts childcare fees have been harmonised with county court equivalents.
	The current financial objective for family proceedings in the county courts and above is to recover 66 per cent of the full cost, discounting the cost of exemptions and remissions, by 2007–08, with an equivalent regime in the magistrates' courts. For the longer term, we plan to review the objectives for family business as part of the 2007 spending review.
	So the taxpayer makes and will continue to make a significant contribution to the cost of running the civil and family courts. In 2004–05, the cost of the higher courts exceeded fee income by nearly £104 million, or 23 per cent of the total—and that does not count the fees subsidised by the taxpayer through legal aid.
	The current fees order for the magistrates' courts has increased family fees to align with those for the same type of case in the county courts. The increases here are worth about £4 million a year. Harmonising the family fees in magistrates' courts with those in the county courts supports our policy of delivering a unified family service across the jurisdictions, improving the service to users by enabling many cases to be heard more quickly before the appropriate tier of judiciary. It is only right that the same fee should be charged for what is, effectively, the same overall service.
	In relation to civil proceedings fees have been increased to bring the majority in line with the estimated cost of work involved. The increases are worth about £16.5 million a year. Many of these civil fees are paid for by public authorities, as the noble Lord, Lord Goodhart, said, enforcing debts such as council tax and child support. However, the cost of these fees can be passed on, in turn, to the debtor.
	The current fees order increases most fees for private law family proceedings to a level that broadly equates to the full cost of the services provided. The increases are worth about £14 million a year. Following consultation, my noble and learned friend the Lord Chancellor decided to defer the proposed increase on ancillary relief applications. Consultees raised serious concerns due to the size of the increase and potential impact on children, so it was thought better to await the outcome of the review of the exemption and remission system later this year. A significant number of litigants will not be required to pay the fees because they qualify for legal aid or fee exemption or will be granted fee remission. Exemptions and remissions account for about 13 per cent of the total cost of family cases in 2004–05.
	There are approximately 5 million people in receipt of specified means-tested benefits or tax credits who are eligible for automatic exemption from court fees. Anyone not qualifying for exemption but who would suffer financial hardship if required to pay fees, whether in full or in part, may be granted remission, in full or in part. The test for remission is based on both income and expenditure—it takes full account of all of a person's commitments and liabilities not just how much money they have or receive. In protecting access to justice through the department's system of fee concessions, the taxpayer, in effect, paid subsidies in the last financial year with a value of nearly £23 million for those exemptions and remissions, with over £15 million, or 67 per cent, of exemptions and remissions in respect of family proceedings alone.
	Setting fees generally at levels lower than full cost price would mean that corporations and other wealthy litigants would benefit from the taxpayers' contribution, increasing its cost and, in turn, putting pressure on other budgets such as legal aid. These are public expenditure decisions for the Government. What the state provides free, or at a charge, is a matter of policy for the Government. They must determine priorities in the allocation of scarce public resources. We recognise that citizens in a democracy under the rule of law have a constitutional right of access to a court system, but it is not a constitutional right to free access, provided those who cannot pay are protected.
	These fees orders must be seen in the context of our longer term strategy of reviewing and reforming the court fees system. Its objectives are to ensure that the system meets the cost recovery targets for civil, family and probate business, including, as appropriate, the cost of modernisation. Additionally, it protects access to justice through a well targeted system of exemptions and remissions. Thirdly, it ensures that taxpayers' contributions to the cost of the court system remain affordable. Finally, so far as is practicable, it manages broadly to match the level of particular fees, or sets of related fees, to the cost of the particular process and types of case concerned.
	Her Majesty's Courts Service is undertaking two major reviews in 2006 to deliver this strategy. First, Access to Justice is a fundamental review of the system of exemptions and remissions to ensure that it adequately protects access to justice and is operated consistently by courts. That review is to be overseen by a steering group of stakeholders, chaired by my noble friend Lady Ashton of Upholland. The other major review will be of the structure of the fees system. That is, the point at which fees are charged, the key objective here being to achieve a closer match of income and cost drivers, both to make the system fairer—as between different types of litigant—and to make it easier to ensure that cost and funding remain in balance as workloads change.
	Both the noble Baroness and the noble Lord asked a number of questions and made a number of points, which I shall attempt to respond to. The noble Lord, Lord Goodhart, was very concerned about the impact of fees on local authorities. Across the piece we have calculated that it would probably cost an increase from 70p to council tax fees: an increase of £1.5 million, spread across some 300 district, county and unitary authorities, such as the London boroughs. I do not think one can argue that this will be so onerous an impact upon budgets. It is a minor cost pressure on part of their service, though an important one. Clearly it is right that local authorities can recover the cost of, in particular, chasing debtors for council tax.
	The noble Lord, Lord Goodhart, referred to the importance of departments being responsible for their budgets, effectively asking what would be the point of charging fees to those entitled to legal aid. The department responsible for both budgets and legal aid budgets are planned in light of the fact that it pays the cost of court fees. That has to be very carefully taken into account. The noble Lord, Lord Goodhart, made considerable comment and play on the big percentage increases involved. Yes, raising the existing fee of 70p—which, I am sure the noble Lord would accept is not a fair reflection of the real cost of the service—to £40 produces a big percentage increase. That does not justify a lower fee and, in any event, means that the taxpayer subsidises the cost of enforcement against people refusing to pay maintenance for their children. It is clearly not a particularly effective or efficient use of scarce public resources. There is a larger percentage increase than one might predict for many of these fees simply because they have not been increased very frequently in recent times.
	I think that the noble Baroness, Lady Morris, also asked me to confirm some of the detail about exemptions and remissions. Automatic exemption is available for those on specified means-tested benefits; that is, income support, jobseeker's allowance, pension guarantee and, in some cases, tax credits. As I said earlier, some 5 million people qualify for those exemptions and remissions within the current scheme. Those who do not qualify for exemption but who would suffer hardship if required to pay the fee may be granted discretionary remission in full or in part. As I explained, the assessment is based not only on income but on expenditure. There is a leaflet entitled Court Fees—do you have to pay them? which carefully explains the procedure for applying for exemptions and remissions.
	We are, as I said, undertaking a review of how exemptions and remissions operate. I am sure that both the noble Lord and the noble Baroness will wish to make their views known to those conducting the review, who I am sure will pay considerable and careful attention to today's debate.
	Finally, the noble Baroness, Lady Morris, referred to efficiency savings. Of course Her Majesty's Courts Service is very conscious of the need to maximise efficiency and minimise the cost to fee payers and of course to taxpayers. The Courts Service has recently published its business strategy. Clearly built into that business strategy is an appreciation and understanding of the need to achieve greater efficiency so that the service in general does not become excessively burdensome to fee payers and taxpayers alike.
	I am grateful to both the noble Baroness and the noble Lord for their contribution. I hope that the policy context within which I have explained the fee increases and also some of the background history will assuage some of their concerns. But clearly this is an issue for further debate in terms of how the two reviews to which I referred will be conducted. No doubt there will be further opportunity to look at some of the issues that have been raised.

Lord Goodhart: My Lords, I am grateful to the Minister, who has done his best on an impossible task. Speaking for myself, I can say that my concerns are by no means assuaged. Clearly, there are very serious burdens particularly on those involved in family litigation in the family court or the magistrates' courts. The Minister said that 5 million people are exempted from having to pay fees because they receive means-tested benefits. That figure of 5 million represents not much over one-tenth of the adult population of this country. It is also true that a large-ish proportion of that 5 million are likely to be pensioners who are the least likely to be affected by proceedings in the family courts. It is plainly a serious burden for those on middle incomes, not just on the lowest incomes, who get involved in family litigation, which is particularly painful.
	I have no particular concern with the principle that, in general, those involved in civil litigation should pay a fee that represents the recovery of the costs of their litigation to the court system. But when it comes in particular to family cases the situation is very different. These are particularly painful. They are particularly important to the people involved, and there is an exceptionally strong case for saying that fees should be kept at a level that will be acceptable to those with average incomes, and not only to those on means-tested benefits. It would protect those people from unacceptable fee levels. So there is a very strong case for saying that there should be an element of subsidy in the cost of court fees in these cases.
	Having said that, for the reasons that I gave before, I have not sought to press the Motion, as that would involve setting aside the new fee orders, and I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.

Environmental Offences (Use of Fixed Penalty Receipts) Regulations 2006

Baroness Farrington of Ribbleton: rose to move, That the draft regulations laid before the House on 26 January be approved [16th Report from the Joint Committee].

Baroness Farrington of Ribbleton: My Lords, the Environmental Offences (Use of Fixed Penalty Receipts) Regulations 2006 implement a key element of the Clean Neighbourhoods and Environment Act 2005. The Act provides local authorities with new powers to set fixed penalty rates and, for the first time, parish councils will be able to issue fixed-penalty notices for some offences. Both will be able to retain the receipts from the fixed penalties to fund enforcement functions. However, it also provides the Secretary of State with the power to allow receipts to be used to fund other functions, subject to the approval of Parliament.
	The regulations allow high-performing local authorities—meaning those categorised as excellent or good following a comprehensive performance assessment—to spend receipts for litter-related offences, graffiti, fly-posting and dog control order offences on any of their functions. In the event that any such authorities lose their excellent or good categorisation, they will have one year from the date on which the order has effect in which they can continue to spend their receipts on any such function.
	The regulations will allow parish councils to retain these receipts to fund their enforcement functions. In addition, parish councils with quality status, which is the parish council equivalent of good or excellent for local authorities, will be able to spend fixed-penalty receipts on any of their functions and, should they lose it, they will have one year in which they can continue to spend receipts on any function. The regulations also require parish councils to supply information relating to fixed-penalty receipts to the Secretary of State. I commend these regulations to the House. I beg to move.
	Moved, That the draft regulations laid before the House on 26 January be approved [16th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)

Baroness Byford: My Lords, I am very grateful to the Minister for bringing the regulations before us tonight for our approval. Obviously we support the theory behind them. I have a couple of questions for the Minister. I understand that parish councils with quality status are entitled to keep their fixed-penalty functions. Will she tell me how many parish councils currently fall within that category? Is it 50 per cent of them, or 25 per cent of them? The statutory instrument does not tell us how many it is, and that would be useful to know.
	Secondly, paragraph (4)(5) on page 2 states that the Secretary of State is required to publish,
	"at such intervals, as she shall determine, a list of parish councils approved by her as Quality parish councils".
	How often do the Government intend that to be? Will it be updated annually, or will it be updated every two years or every five years? That would also be of interest to us.
	Having read the regulations carefully, I also understand that high-performing councils can use their receipts for purposes other than those for which they are defined provided that they fall within the particular range. We do not have a problem with that. But have the Government considered that some councils may not get enough income from their receipts to make what they are trying to do work? I understand that, in some cases, the fixed penalties available from systems already in being to deal, for example, with dog fouling—which I know we will consider later—very often are not taken to task. So, where a council is not doing a duty that it should be doing, is it possible for members of the public to draw that parish council's attention to what it is not doing? If so, how will that be rectified? But, in general terms, we certainly welcome the provision.

Baroness Miller of Chilthorne Domer: My Lords, on these Benches we think it is certainly a good idea to allow councils to spend these fines in the best interests of their localities and, to that extent, we support the regulations and I thank the Minister for introducing them.
	However, we do have difficulties with them and I shall first address the problems at parish level. It may be very difficult, for a number of reasons, for a parish to gain quality status. We have previously heard from the National Association of Local Councils several reasons why this might be a difficult status to attain. When will the Government review whether the whole quality status issue is working? Indeed, very small parishes are at a particular disadvantage in terms of scales of economy, the kind of clerk they can employ and whether that clerk will be able to spend time on training and so on. All of these things lead to quality status. But a parish may not be able to attain it and is then penalised, in effect.
	This is magnified many fold when you get to the next level. The Government were correct to want to raise the standards of some, quite frankly, abysmal local authorities, and to that extent the comprehensive performance assessment is a good idea. Where it becomes a bad idea is when the Government start to use it to impose centralised targets and centralised ideas of what is good or excellent without allowing nearly enough input from local people as to how they feel their council is performing.
	I feel that the application of these regulations will exacerbate the situation. You may have two neighbouring districts, one of which is allowed to spend more because it is excellent. It may be much better off than its neighbour and in a better financial situation, which in itself allows it a more easy path to becoming excellent than a council representing a very deprived area. Such a council will have bigger problems with litter, graffiti and fly-posting and it may be that the Government are introducing a vicious circle here.
	I shall keep an eye on the regulations and see how they go. In the mean time, we shall certainly not oppose them.

Baroness Farrington of Ribbleton: My Lords, I begin by stressing that even if councils do not have quality status, they still keep the receipts. Quality status means that they can spend the money on any of their functions rather than on issues directly related to litter, graffiti, dog fouling and so on. That perhaps answers some of the concerns about the difference.
	I understand that the quality programme is likely to be reviewed within the next couple of years. At the moment, 150 parish councils out of 8,000 in total have this status. It is, of course, for the councils to decide whether they wish to use the powers they are being given.

Baroness Byford: My Lords, I am sorry, but could the Minister repeat those figures, because I missed them?

Baroness Farrington of Ribbleton: My Lords, 150 parish councils out of 8,000 have the status. The remainder can still use the money for the specified functions for their receipts. The ability of councils to operate fixed-penalty schemes will be addressed through the requirement to attend an approved training course. The requirement that parish councils supply the Secretary of State with information relating to fixed penalties will allow us at Defra to analyse and support councils with low payment rates.
	There will be a range of issues. Any authorised officer of a district or parish council, together with anyone else authorised by a district or parish council, is able to issue fixed-penalty notices. Furthermore, chief police officers, under the Police Reform Act 2002, can accredit police community support officers; under the Act, they, too, will be able to issue fixed penalties. This may be of great assistance, particularly to the smaller parish councils.
	I know that the parish councils will wish to keep under review the issues of concern and questions that both noble Baronesses have asked. I am sure that parish councils in particular will welcome the opportunity this will give them to use their powers where appropriate for a parish council—on a beach, for example. I understand that, in the eyes of the parish councils, particularly the smaller ones, the income may not be sufficient to enable them to do all that their local community wishes them to do. But I am quite sure that when good parish councils, of which there are hundreds and hundreds, start to work using these new powers, the local residents will be extremely supportive, because the issues they will be dealing with are of great concern locally.

On Question, Motion agreed to.

Dog Control Orders (Prescribed Offences and Penalties, etc.) Regulations 2006

Baroness Farrington of Ribbleton: rose to move, That the draft regulations laid before the House on 26 January be approved [16th Report from the Joint Committee].

Baroness Farrington of Ribbleton: My Lords, the regulations are necessary to implement an aspect of the Clean Neighbourhoods and Environment Act 2005, which introduces dog control orders to replace local authority and parish council powers to make dog bylaws. I know that both noble Baronesses will remember this legislation well because they played a major role in its passage through your Lordships' House.
	Under the new arrangements, local authorities and parish councils may make dog control orders relating to four matters: the fouling of land by dogs and the removal of dog faeces; keeping dogs on leads; excluding dogs from particular areas; and limiting the number of dogs which one person may take on to specified areas.
	The offence provided for in a dog control order, and the maximum penalty, must be prescribed in regulations, and such regulations may also specify the wording to be used in a dog control order and the form of the order. The regulations duly prescribe the offences for which dog control orders may be made, and provide model forms for each type of order. The regulations also provide the maximum penalty for all five offences, which is a fine not exceeding level 3 on the standard scale—currently £1,000. The regulations also provide for it to be an offence under a dog control order not to put a dog on a lead when required to do so by an authorised officer of a local authority or parish council.
	The provisions of the Dogs (Fouling of Land) Act 1996 will be repealed to allow the dog fouling offence to be brought into the dog control order regime. However we know that some local authorities wish to continue with the provisions in the 1996 Act, so we are making legislative savings to allow them to do so. I commend these regulations to the House. I beg to move.
	Moved, That the draft regulations laid before the House on 26 January be approved [16th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)

Baroness Byford: My Lords, I thank the Minister for bringing these regulations before us today. We indeed participated in the Clean Neighbourhoods and Environment Act.
	I have just a couple of questions about the regulations. Having read the Act, I think that these regulations are as one might expect. I can see that they will assist in controlling behaviour in large towns and metropolitan districts that has long been unacceptable and which seems to have been on the increase recently. I am pleased to see particularly that it will now be possible for councils to act to reduce "crocodiles" of dogs that are paraded around certain parts of our cities, some under control and others, on occasions, totally out of control.
	It may also be possible to use part of the legislation to reduce the problem of people walking in the countryside with what can be described only as packs of dogs. They are often on footpaths or in fields through which a footpath passes. The dogs are infrequently on leads and can be both intimidating to humans and destructive to wildlife, as well as to cattle and sheep.
	However, I think there may be a catch, and I would be most grateful if the Minister could assist me. In the Act, parish councils are classed as secondary authorities. Few, if any, employ legal experts. Will they have to pay somebody to draw up the orders? I am not quite clear on that. If so, how much would that be expected to cost and would the parish councils normally ask their local primary authority to do it for them? That is one possibility.
	The Act seems to be quite clear that fixed penalties accrue to whichever council employs the officer who tackles the culprit. A parish clerk, for example, might earn his council the odd pound or two by keeping an eye on dog control areas in the vicinity of his own parish. Is a parish councillor allowed to become an authorised officer? That is not quite clear.
	Should an officer authorised by a parish council come across a defaulter who refuses to pay the fixed penalty, what procedure should that officer follow? How much would it cost the parish council? Is the level of proof required in a court any different from that authorised officer's challenge of, "I saw your dog contravene the notice. This is the fine". If the parish council takes the miscreant to court, does it keep the fine? Can it claim all the costs of going to court? If it does, will they be granted?
	My concern is that it may not be worth a parish council setting out its own orders. I appreciate that the noble Baroness explained to us that authorities can use the existing legislation if they so wish. However, if they change over to the new orders, I presume that the relevant primary council would include the parish in its coverage. How much would it be reasonable for a primary authority to charge for that inclusion?
	Dog fouling has long been a bane and a pain to all of us, whether we live in the town or the country. It should be a basic requirement of anybody who is walking a dog in town or country to carry suitable equipment to make sure that they leave it in a decent state for other people. We therefore welcome the regulations. Dog fouling is to me what chewing gum is to other people. Both are horrid and both should be eradicated. However, I would be grateful if the Minister responded to the one or two practical questions that I have asked.

Baroness Miller of Chilthorne Domer: My Lords, I welcome these regulations. I certainly remember the Clean Neighbourhoods and Environment Act, not least because of the speed with which it passed through your Lordships' House. It was effectively guillotined by the general election. Nevertheless, we were pleased to see its introduction.
	There has probably been nothing more burdensome, especially for parish councils, than the old burden of making bylaws as regards dogs. When councils had to deal with children's playgrounds and so on, the implementation of provisions took up a lot of their meeting time. I presume that if the primary authority makes an order which covers its whole district and employs, for example, dog wardens or environmental wardens who deal with dog fouling, it will be able to work within the parishes. In the Liberal Democrat-controlled authorities that is usually how it works.
	The "reasonable excuse" clause will have to be tried over time. I hope that it will not prove to be a large loophole for people. We welcome the regulations. One of the differences in London has been that, when autumn comes, one can walk through the piles of leaves mostly without fear. The regulations will improve the situation still further.

Baroness Farrington of Ribbleton: My Lords, I thank both noble Baronesses for welcoming the order. As a grandmother, I appreciate their points about taking walks. Shoes can be a nightmare at the end of a walk in the country or in a park. The noble Baroness, Lady Byford, is right about the need to control large crocodiles of dogs and, virtually, packs in rural areas.
	The model forms are constructed so that legal assistance is not needed to draw them up. We have issued guidance which enables one to follow a step-by-step process. Parish councillors may be an authorised officer. However, in guidance we have advised against that. The noble Baroness also asked about finance. If the parish council were to prosecute, it could not keep the fine—the result of the prosecution.
	It is for primary and secondary authorities to decide between themselves what arrangement they want to come to for charging and assistance with prosecutions. Parish and community council fixed-penalty notices are currently issued by a range of officers authorised by the local authority, in addition to police officers such as police community support officers or council workers, such as town patrollers, who are employed specifically to enforce laws on dog fouling and litter.
	Similarly, appropriate employees of parish councils will issue the fixed-penalty notices not parish councillors. Many larger parish councils already employ rangers, wardens and general maintenance teams, which will be well placed to take on this responsibility. The new regime will be enforced. The primary and secondary authorities will be responsible for enforcing the orders, including issuing the penalties and taking to court those who opt not to pay. I agree that there is a difficulty if people refuse to give their details. In the smaller parish councils it may be slightly easier because more people know exactly who everyone is in the parish council area.
	I shall check whether there are further areas I have not covered and will write to the noble Baroness.

Baroness Byford: My Lords, it is my fault. I missed a point. The noble Baroness referred to those who employ dog wardens. I gather that 94 per cent of councils employ at least one dog warden. In 25 per cent of cases no fines are issued when people are caught and are known to be contravening the law. Why? That is a high percentage. My question need not be answered now. The Minister can certainly respond in writing.

Baroness Farrington of Ribbleton: My Lords, I can only answer anecdotally. My experience in local government is that people attempt to give people a warning, but watch very carefully. Those who are not fined on the first occasion but given a warning may well find therefore that they are watched most carefully. If there is anything I can add more generally I will write, but that is my experience.

On Question, Motion agreed to.

Restricted Byways (Application and Consequential Amendment of Provisions) Regulations 2006

Baroness Farrington of Ribbleton: rose to move, That the draft regulations laid before the House on 16 February be approved [19th Report from the Joint Committee].

Baroness Farrington of Ribbleton: My Lords, this Motion deals with the Restricted Byways (Application and Consequential Amendment of Provisions) Regulations 2006. Restricted byways are a new category of highway introduced by the CROW Act, and again I compliment both noble Baronesses, who worked very hard to ensure that that piece of legislation was as effective as it could possibly be. Restricted byways have a right of way on foot, on horseback or leading a horse, and for vehicles other than mechanically propelled vehicles, including pedal cycles.
	Restricted byways will deal with the long-standing problem of some local authorities failing to fulfil their statutory duty to reclassify all their RUPPs. The CROW Act provides instead for all RUPPs to become restricted byways on commencement of Section 47 of that Act. These regulations simply amend existing highways legislation to ensure that restricted byways operate sensibly within the existing framework of relevant legislation.
	There is nothing controversial about the content. This is a technical exercise. Most amendments simply add or substitute the words "restricted byway" into existing provisions. The regulations provide for restricted byways to be created from scratch. In addition, the Natural Environment and Rural Communities Bill—and here we all get a sense of déjà vu—provides for restricted byways to be recorded on the definitive map and statement on the basis of either historic evidence or evidence of a qualifying period of use. So in future, where rights for mechanically propelled vehicles are extinguished by the Bill's provision but the route carries historic vehicular rights, it will be possible to record that route as a restricted byway rather than a BOAT.
	I am aware that many Members of this House are keen to see the rights of way provisions in Part 6 of the NERC Bill commenced as soon as possible. These regulations are both complementary and essential to the Bill's rights of way provisions. I commend these regulations to the House. I beg to move.
	Moved, That the draft regulations laid before the House on 16 February be approved [19th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)

Baroness Byford: My Lords, I thank the Minister for bringing these regulations before us. I have to say I smiled when I saw what was on the Statutory Instrument, and thought "Yes, come next Monday, we will actually be at that part of the Bill, dealing with this very issue". She is quite right; my understanding is that this is a technical draft Statutory Instrument. Part 1 alters and amends 14 Acts; Part 2, 12 pieces of subordinate legislation. They will then come into force once the NERC Bill is enacted. I understand that the Minister, Jim Knight, has signed this to the effect that the provisions are compatible with the Convention on Human Rights, so I accept that, and I also accept that they are complementary and essential if we are going to push ahead with the changes we are dealing with.
	My one question concerns the fact that disability is not mentioned in this at all. I want to make sure when we are dealing with the Bill on Monday that people who have disabled needs will still be able to have access, and will not find themselves on the wrong side of the law.

Baroness Miller of Chilthorne Domer: My Lords, I thank the noble Baroness for introducing these regulations. I do not want to rehearse any of the interesting debate that I am sure we will have on Monday with the NERC Bill.
	However, these regulations apply to the CROW Act, and six years seems quite a long time to introduce them. Having said that, I welcome them, and I am tempted to suggest that the three of us should found a club based on those who took part in consideration of the CROW Act. With respect to both noble Baronesses, I would have to call it the old crows club.

Baroness Farrington of Ribbleton: My Lords, I am not a little offended by that, but the noble Baroness's noble friend from Lancashire may not be happy if I greet him as an old crow. I shall therefore be careful.
	These regulations contain an amendment to the Chronically Sick and Disabled Persons Act 1970, which ensures that no statutory provision prohibiting or restricting the use of byways will affect invalid carriages. I hope that that reassures the noble Baroness, Lady Byford. If she has any further concerns, I have no doubt that they will occur again on Monday.
	The noble Baroness, Lady Miller, referred to the time taken. The redesignation of roads used as public paths to restricted byways has been an ambitious task and has involved scrutiny of more than 40,000 references to primary and secondary legislation, and detailed consideration of around 100 pieces of legislation, to ensure that this new category will operate as intended. The new rights of way legislation in the NERC Bill builds on the category of restricted byways by enabling rights acquired by non-mechanically propelled vehicles to be recorded as restricted byways rather than byways open to all traffic.
	Before commencing the restricted byways provision, we needed to ensure that the final terms of the new provisions were compatible. We are now confident that that is the case. I thank both noble Baronesses for their support on all three sets of regulations tonight. I commend the regulations.

On Question, Motion agreed to.

Identity Cards Bill

The Bill was returned from the Commons with the Commons disagreement to certain Lords amendments insisted on and with amendments proposed in lieu; and with a Commons amendment to which the Lords have disagreed not insisted on; it was ordered that the Commons amendments be printed.

Terrorism Bill

The Bill was returned from the Commons with the Commons disagreement to certain Lords amendments insisted on and with an amendment proposed in lieu; with a Commons amendment to which the Lords have disagreed insisted on; and with the Commons disagreement to the remaining Lords amendment not insisted on; it was ordered that the Commons amendments be printed.
	House adjourned at thirteen minutes past six o'clock.

Thursday, 16 March 2006.